Update: Generation of Economic Activity 10th July 2014

QUESTION NO:  26
DÁIL QUESTION addressed to the Minister for Public Expenditure and Reform (Deputy Brendan Howlin)
by Deputy Bernard J. Durkan
for ORAL ANSWER on 09/07/2014 

 To ask the Minister for Public Expenditure and Reform the extent, if any, to which he expects to be in a position to use economic growth as a means of achieving the targets laid down by the Troika in 2015 having particular regard to the need to generate economic activity; and if he will make a statement on the matter.
 
REPLY.

While Ireland is no longer in a Troika programme, following our successful programme exit in December 2013, we are still subject to the fiscal deficit ceilings set out in the Excessive Deficit Procedure.  The Government’s overall fiscal target is to bring the General Government Deficit below 3 per cent of GDP by the end of 2015 and, in progressing towards that, we have targeted to reduce it to 4.8 per cent this year. 

As the Deputy will be aware, last week the CSO issued updated GDP assessments, which include an upward revision to the level of GDP for 2013. The revision incorporates technical changes being implemented across all EU Member States. The 2013 revised GDP figures will improve the 2014 fiscal positon and, assuming no other changes, it is estimated that it could bring the 2014 Deficit/GDP ratio closer to 4.5 per cent, than the 4.8 per cent forecast in the Stability Programme Update published by the Department of Finance in April 2014. This is positive news.

The CSO also published growth figures for the first quarter of 2014, which are encouraging. The increase of 4.1 per cent in GDP in the first quarter of 2014, when compared to the same quarter last year, along with the solid performance recorded in the Exchequer returns for the first half of 2014 are very welcome.

In setting priorities for Budget 2015 in October this year, the Government will continue to balance the need to ensure sustainability in the public finances with the need to stimulate economic activity and protect the vulnerable. The Budget will be framed using the most up to date economic and fiscal data, and any positive developments in relation to GDP will inform the Government’s Budgetary decsions.