Meetings are held between the social partners, including Government representatives, on a regular basis to discuss implementation of the Partnership 2000 agreement. Social consensus has been a very significant factor in the success of our economy. Pay moderation linked to tax reductions and increased resources in the social area, coupled with reform of the public finances, has given us the stable economic environment in which investment could take place and employment could grow. Social consensus has been a significant factor in keeping inflation at moderate levels in the past decade, falling as low as 1.5 per cent in the past two years.
At recent meetings between the Taoiseach, the Tánaiste and the social partners, all issues relevant to Partnership 2000 were discussed, including prospects for inflation. I am satisfied the combination of moderate pay increases linked to significant reductions in taxes under Partnership 2000 will contribute to the maintenance of sound economic conditions. Both my Department and I, in the context of our normal regular contact with the Central Bank, have discussed the prospects for the economy, including inflation. I recognise that potential inflationary pressures exist in the economy. However, current speculation about a significant increase in inflation is overstated and does not take adequate account of the complexities of likely market developments over the coming year.
My Department's forecasts for 1998, published on 3 December 1997 in the Economic Background to the Budget, projected a CPI increase of 2 per cent. This and other relevant forecasts will be reviewed at mid-year and the results will be published in the 1998 Economic Review and Outlook.