asked the Minister for Finance if he will outline the short-term forecasting techniques used by his Department in assessing trends within the economy.
14.
Ceisteanna—Questions. Oral Answers. - Economic Forecasts.
13.
asked the Minister for Finance if he will give an account of the review procedures by which short-term forecasts of economic trends within the economy are up-dated; if he will give the economy forecasts for 1968 and 1969 prior to the April Budget; and if he will further outline the reasons for the changes in the economy projection for 1969.
I propose, with your permission, a Cheann Comhairle, to take Questions Nos. 13 and 14 together.
The short-term forecasting techniques used by the Department of Finance in assessing trends within the economy are those adopted internationally for purposes of demand management. As in most countries, forecasts are made within the framework of the national accounts, which provide a comprehensive measure of the level of economic activity as well as detailed information about the various components of demand which determine that level. In forecasting, reliance is placed upon expert appraisal of the most up-to-date indicators available as well as past behaviour of the main economic variables and their inter-relationships.
Forecasts are periodically up-dated. Forecasting is essentially continuous in nature and the predictions require modification and adjustment as the economic scene changes and the assumptions on which they are based become no longer valid. Regular and careful watch is maintained on the various economic indicators issued weekly, monthly or quarterly by the Central Statistics Office, Central Bank and other organisations and on the main trends in countries with which we have important economic contacts. With the aid of these economic indicators and trends the forecasts are reassessed.
With regard to the Deputy's question concerning the forecasts for 1968 and 1969, a full national accounts projection was not published for 1968 for the reasons given in paragraph 53 of the Department's "Review of 1966 and Outlook for 1967" (Pr. 9372). A general survey of prospects for the year 1968 was, however, given in the "Review of 1967 and Outlook for 1968" (Pr. 9992) in which a growth rate of about 4½ per cent and a balance of payments deficit of the order of £15 million were predicted. It appears now that the final out-turn for the year will not differ markedly from these estimates.
In regard to 1969, the Deputy will appreciate that prior to the April Budget there was little information available on which to prepare a forecast of likely trends for that year. While the prospect for 1969 is now somewhat clearer it would be premature at this stage to publish detailed projections. The results of preliminary work in the Department of Finance suggest that the growth rate in 1969 should not fall below 4 per cent or the balance of payments deficit rise significantly above £30 million. This takes into account the effect of the recent budgetary measures.
Can the Taoiseach say whether any increase in employment is predicted for next year? Has he any estimate for the employment trends that will exist in 1969?
Increases in employment trends would suggest that that will take place. If the Deputy wants details he better put down a question.