Vol. 455 No. 2
104 Mr. Callely asked the Minister for Finance if he has satisfied himself with the targets set out in Ireland's Convergence Programme 1994-1996; if the programme has been altered; and if he will make a statement on the matter. [11960/95]
Ireland's Medium-Term Convergence Programme 1994-1996 sets out targets in relation to meeting the fiscal convergence criteria of the Maastricht Treaty, as well as macroeconomic forecasts for Irish economic growth over the period of the programme.
I believe that the target for the Government deficit contained in the programme, which is to keep the General Government Deficit below 3 per cent of GDP each year, is satisfactory and is sufficient to ensure that Ireland will continue to satisfy the fiscal convergence criteria for participation in phase 3 of Economic and Monetary Union. Of course, performance proved better than this target in 1994, and looks like doing so again this year. In 1994, the General Government Deficit amounted to only 2.3 per cent of GDP, and this year it is projected that the deficit will again be comfortably below the 3 per cent target.
As well as bettering the fiscal deficit target contained in the Convergence Programme, the Irish economy has also out-performed the forecasts for economic growth which were contained in the programme. Real GDP growth of 3.9 per cent was projected in 1994, followed by 4 per cent in 1995 and 1996. However, the actual rate of growth in 1994 was much higher than had been expected, with real GDP growing by over 6 per cent. As a result of this and the lower fiscal deficit I already referred to, the General Government Debt to GDP ratio fell by almost 7 percentage points in 1994 and, based on the current outlook for economic growth and annual deficits below 3 per cent of GDP, further significant falls are expected this year and next year. According to both the OECD and the European Commission, the outlook, now, for 1995-96 is also for higher growth rates than those envisaged in the Convergence Programme.
