Central Bank of Ireland Calls for Stronger Economic Initiatives and Strategic Investments in 2026
•February 20, 2026
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Why It Matters
Enhanced resilience and sustained investment are crucial for Ireland to protect its open economy from geopolitical, trade and climate shocks, positioning it as a competitive hub in Europe.
Key Takeaways
- •Ireland needs targeted infrastructure to boost supply‑side capacity
- •Indigenous firms must complement foreign direct investment growth
- •Fiscal discipline required to build robust government buffers
- •Households encouraged to increase financial market participation
- •EU internal‑market barriers hinder services, need multilateral solutions
Pulse Analysis
The Central Bank of Ireland’s recent addresses come at a time of heightened global volatility, from geopolitical tensions to rapid technological change. While Ireland has enjoyed robust growth post‑crisis, its small, open economy remains vulnerable to external shocks. By emphasizing resilience‑building alongside strategic investment, the bank signals that maintaining macro‑financial stability will require proactive policy rather than reactive measures.
Makhlouf’s five‑point domestic agenda—spanning housing, transport, energy, water, indigenous business support, fiscal prudence, household market engagement, and improved corporate financing—targets the structural bottlenecks that have limited domestic investment for a decade. Coupled with Deputy Governor Madouros’s call for a sustained rise in public and private capital, the message underscores that infrastructure and financing reforms are essential to unlock productivity and mitigate the EU’s internal‑market frictions, which the governor likened to a 45% tariff on goods and over 100% on services.
For investors and policymakers, the bank’s stance offers a clear roadmap: prioritize projects with high multiplier effects, align fiscal choices with long‑term buffer building, and leverage the EU Savings and Investment Union to channel capital into resilient sectors. Successful execution could cement Ireland’s reputation as a stable, high‑growth destination within Europe, attracting both foreign direct investment and domestic entrepreneurial activity while safeguarding against future economic turbulence.
Central Bank of Ireland Calls for Stronger Economic Initiatives and Strategic Investments in 2026
In closely timed addresses this month, senior officials at the Central Bank of Ireland have underscored the urgent need for Ireland to strengthen its economic foundations amid heightened global uncertainty. Governor Gabriel Makhlouf and Deputy Governor Vasileios Madouros emphasised that while the Irish economy enters 2026 from a position of strength, proactive measures in resilience‑building and investment are essential to safeguard long‑term prosperity.
This month, Governor Makhlouf delivered a clear message: building economic resilience is not optional.
Speaking against a backdrop of geopolitical tensions, accelerating trade fragmentation, technological disruption, and the accelerating effects of climate change, he warned that Ireland’s small open economy and substantial international financial sector face significant adaptation challenges.
“The implications of the ongoing transition of the international order and global trade environment are yet to be fully borne out,” Makhlouf noted, highlighting how recent developments may have sped up these shifts.
The Governor outlined five domestic priorities for the Government: expanding supply‑side capacity through targeted infrastructure in housing, transport, energy, and water; bolstering the indigenous business sector to complement foreign direct investment; accumulating fiscal buffers via disciplined spending and prudent policy; enhancing household resilience by encouraging greater retail participation in financial markets; and improving access to debt and equity finance for local firms.
He also stressed the importance of working with European partners to complete the single market and craft new multilateral trading arrangements that deliver stability.
Makhlouf’s regulatory and supervisory priorities for 2026 focus on maintaining financial‑sector strength against macro‑financial and geopolitical risks, protecting consumers through updated safeguards, harnessing technological change (including artificial intelligence), and supporting the transition to a low‑carbon economy.
He pointed to Europe’s internal market barriers—equivalent to a 45 % tariff on goods and 110 % on services—as a reminder that the EU must leverage its strengths in peace, prosperity, and potential rather than dwell on weaknesses.
Recently, Deputy Governor Vasileios Madouros reinforced these themes by focusing on the critical role of investment.
Despite robust economic growth in recent years, investment in core domestic sectors has remained subdued over the past decade, leaving infrastructure strained after the post‑financial‑crisis recovery.
Madouros argued that higher, sustained investment represents both an opportunity and a necessity to build resilience against profound economic and societal shifts.
He welcomed the Government’s plans for a substantial rise in public investment over the coming decade but cautioned that success depends on careful fiscal choices, improved delivery efficiency, greater dynamism among indigenous businesses, and access to diverse, resilient financing.
Progress on the EU’s Savings and Investment Union will be vital to mobilising the necessary capital.
“Raising Ireland’s domestic investment rate is an opportunity to strengthen the foundations—and resilience—of our economy into the future,” Madouros stated, adding that such investment must be both sustainable and sustained to deliver benefits for people, businesses, and overall economic performance.
Together, the two interventions paint a consistent picture: Ireland must move beyond short‑term strengths to embed deeper structural resilience.
By prioritising infrastructure, indigenous enterprise, fiscal prudence, and efficient capital allocation, policymakers can position the economy to thrive amid uncertainty.
The Central Bank has committed to supporting this particular agenda through its supervisory work and forthcoming publications, including its full Regulatory and Supervisory Outlook.
As global headwinds intensify, these messages from Ireland’s central bank serve as a timely reminder that resilience and investment are not competing priorities—they are two sides of the same strategic coin.
With decisive action in the months ahead, Ireland can potentially convert current advantages into enduring economic security.
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