We Must Shape the New Global Economy, Not Preserve the Old

Governor of the Central Bank of Ireland Gabriel Makhlouf spoke today at the Atlantic Council during IMF World Bank Week in Washington DC.

Speaking ahead of the event, Governor Makhlouf said: “Ireland is a small, highly open, highly globalised and very well-connected economy in an increasingly fragmented world.   An environment of trade barriers and policy uncertainty and unpredictability has economic costs for us. Our analysis suggests that 15 per cent tariffs will reduce our exports to the US. But they are not prohibitive to trade, and our latest projections anticipate a slowdown from 2.9 per cent growth this year to just over 2 per cent in the coming years.

“This serves to highlight that while the US market is important for Ireland, it is far from our only one. 

“Ireland is part of the world’s largest single market. We are facing the current challenges from a position of relative strength, having benefitted from decades of FDI-led growth.  We have a flexible and skilled labour force, strong economic and population growth, and a welcome, intense focus from Government on closing infrastructure gaps in water, energy, transport, and housing.

“However, it remains essential that Ireland integrates further into the EU’s single market and for the Single Market itself to deliver on its potential as set out in last year’s recommendations from Mario Draghi and Enrico Letta.”

“New ways of working and new relationships are vital in the face of the headwinds we see globally. 

“That is why institutions like the Atlantic Council and the IMF are important.  We in Ireland value our engagement with global institutions and we value relationships that support our commitment to multilateralism and international cooperation, collaboration and understanding.

“The IMF’s convening power brings us all to the same table, offering a vital forum for dialogue and coordinated action. It’s not a theoretical exercise.  It is the essential work that helps us see past our domestic concerns to the broader interconnected reality.”

Commenting on current monetary policy, Governor Makhlouf said: “We continue to be in a good place with the disinflationary process behind us, the European economy showing resilience and inflation where we want it to be.”

“We are not pre-committing to a particular rate path and will continue to determine the appropriate monetary policy stance by following a data-dependent and meeting-by-meeting approach.”

Concluding, Governor Makhlouf said: “We need to recognise that the world which we grew up with has changed and that more change is guaranteed.

“I suggest that our energies should be tilted towards the challenge of creating the new world ahead of us rather than the comfort of preserving the old. The stage is now set for building new relationships, adopting new frameworks, and creating new paradigms for the world that our children and grandchildren will inhabit.

I know that Irish institutions are committed to international cooperation, and we will continue to advocate for – and play a key role in – developing the new multilateral order that our economies need and our communities want.”

ENDS

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