Dublin unveils bumper budget with tax cuts and higher wages as election looms

Ireland's Minister for Finance and Minister for Public Expenditure outlined the national budget for 2025 on Tuesday afternoon, presenting financial plans for the year ahead.

"Progressivity, fairness and catalysing real opportunity for the future … have been central to how Budget 2025 has been designed," said Finance Minister Jack Chambers.

With an election on the cards before March next year, the government sought to appeal to voters with a raft of giveaways.

Reductions in income tax have been promised, while the state will increase the minimum wage by 80 cents from 1 January.

In another crowd-pleasing move, the minimum inheritance tax threshold will be raised, meaning larger bequests can be given tax-free.

A reduced rate of VAT for gas and electricity will also be extended.

"As expected, the Budget brought a considerable package of spending increases and tax cuts, in an attempt to please a large proportion of the electorate as Ireland heads to polls soon," said Ricardo Amaro, lead economist at Oxford Economics.

"The economy is in good health and a tight labour market suggests that this level of stimulus is excessive," he continued.

"Domestic-generated inflation has proven stickier [compared to imported inflation] and needs to be closely-watched, with today’s Budget reinforcing upside risks in this area."

Ahead of Tuesday's announcement, economists had warned politicians not to be overly lax with the nation's purse strings.

The Irish Fiscal Advisory Council (IFAC) notably argued that although Ireland seems to have a healthy spending margin, inflationary risks could resurge above the 2% target.

If more money is injected into the economy, increased demand for goods and services could push up prices.

According to projections given by