The Governor of the Central Bank Gabriel Makhlouf has told the Minister for Finance Simon Harris that he should ensure spending growth "is anchored to the economy's sustainable revenue-raising ability."
The Government’s projections show that when the windfall taxes paid by multinationals are excluded, Ireland’s underlying deficit will rise from €7.3 billion last year to €13.5 billion in 2026.
In a letter to Mr Harris, the Central Bank Governor said the Coalition should avoid the "pro-cyclicality" of adding money to a rapidly expanding economy - a criticism which has been voiced by the Irish Fiscal Advisory Council.
In the letter Mr Makhlouf also said the Central Bank would continue its supervisory work related to how the financial sector, including insurance companies, is embedding climate into risk management.
He said this included assessing companies’ responses to the "increasing frequency and severity" of climate-related weather events.
He added that bank would continue to step up safeguards against financial crime, including how companies such as banks support the victims of fraud and scams "while detecting and punishing unauthorised providers and those engaged in market abuse."
Mr Makhlouf also said the Central Bank would continue to deliver its responsibilities under legislation which is designed to ensure that consumers will have access to cash.
