Dáil Éireann debate -
Wednesday, 28 Jan 1998

Vol. 486 No. 1

Written Answers. - Inflationary Pressures.

Bernard Allen

Question:

63 Mr. Allen asked the Minister for Finance the steps, if any, he has taken to deal with the Central Bank's concern regarding inflationary pressure derailing current economic growth; and the discussions, if any, he has had with the Central Bank regarding their concern. [1194/98]

Bernard J. Durkan

Question:

68 Mr. Durkan asked the Minister for Finance the proposals, if any, he has to take measures to arrest any tendency towards inflation; if he will outline the heading or headings by which he might undertake such a process; and if he will make a statement on the matter. [1946/98]

Jim O'Keeffe

Question:

69 Mr. J. O'Keeffe asked the Minister for Finance whether he expects inflation to increase in 1998; and if he will make a statement on the matter. [1955/98]

Liz McManus

Question:

120 Ms McManus asked the Minister for Finance to give his Department's estimate of the likely level of inflation during 1998 based on the latest indicators available; and if he will make a statement on the matter. [1866/98]

Minister for Finance (Mr. McCreevy):

With the permission of the Ceann Comhairle, I propose to take Questions Nos. 63, 68, 69 and 120 together.

Inflation in 1997 turned out to be 1.5 per cent on a consumer price index basis, compared with the original forecast of 2.2 per cent as published at the beginning of the year. My forecast for inflation for 1998 is 2 per cent as published on 3 December in the Economic Background to the Budget. This was based on the standard assumption of unchanged interest and exchange rates. Updated forecasts will as usual be published by my Department at mid-year in the Economic Review and Outlook publication.

I specifically referred in my Budget Statement to the necessity to contain inflationary pressures. The personal tax reductions which I announced will help to achieve that objective. They are, together with the positive action in relation to social inclusion, higher investment to tackle skills shortages and improve our infrastructural base, part of a package. This is, combined with the continued improvement in the public finances, and the programme of social consensus between the Government, unions, farmers and employers, designed to secure the right conditions for sustainable economic growth.

Both the Central Bank and the Government are agreed that the key objective of Ireland's fiscal policy is to promote sustainable growth without the risk of overheating, and I shall continue to pursue that objective in my next budget.