Willie O'Dea (Limerick City, Fianna Fail)
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112. To ask the Minister for Finance his response to the annual letter from the Governor of the Central Bank ahead of Budget 2026; and if he will make a statement on the matter. [39268/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Governor Makhlouf issued his pre-Budget letter at the end of June. He highlights inter alia the risks to our economy associated with the deeply uncertain international environment given our exposure to the multinational sector.

Government is very conscious of these issues.

This Government’s perspective, and in line with the Governor’s letter, is that the policy response to the global uncertainty should be to focus on the ‘controllables’, in other words focusing on what we can directly influence. This will involve improving resilience, competitiveness and productivity, which will be achieved by addressing major infrastructural bottlenecks in key strategic areas, as well as investing in key skills and training.

In his letter, the Governor also noted the importance of fiscal policy in ensuring sustainable economic growth and stable inflation. On the fiscal side, the Governor states that budgetary policy should be targeted at key priorities: improving resilience and broadening the tax base, addressing infrastructural gaps, as well as planning for the fiscal impact of long-term challenges.

The letter also highlights the concentration risks in our tax base, of course most prominent in respect of corporation tax but with associated spillovers to income tax and VAT revenues.

Government is acutely aware of these issues and that is why a key priority is to build up our fiscal buffers so that we can continue to provide for our people if, and when, the next economic shock comes. That is why the establishment of the Future Ireland Fund, and the Infrastructure, Climate and Nature Fund is vital as it allows Government to set aside a portion of windfall receipts to prepare for future challenges.

We are currently in the process of drafting the fiscal parameters for Budget 2026 which will be decided in the coming weeks as part of the Summer Economic Statement . The annual letter from the Central Bank is an essential input to these discussions and the points in the Governor's letter will be taken into consideration.