Bernard J. Durkan
Question:191 Mr. Durkan asked the Minister for Finance if concerns have been expressed by the ESRI in regard to Government spending; and if he will make a statement on the matter. [14679/02]
Written Answers. - ESRI Report.
The Spring 2002 Quarterly Economic Commentary was issued by the ESRI in April and a summary of its findings are: the Irish economy grew by 6.8% in real terms in 2001 and real GDP growth of 3.6% is forecast for 2002; the recovery in economic growth will give rise to improved employment prospects and unemployment is expected to average 4.6% for 2002; despite improved growth conditions and given the expenditure commitments and revenue projections, the public finances would deteriorate this year; and the most potent threat to Irish economic prospects is the strength of price inflation.
With regard to public spending, the ESRI also noted that there are expectations and pressures for additional spending but that growth in spending must be matched by revenue growth in order to avoid any breach of the EU Stability and Growth Pact.
This Government is acutely aware of the existing pressures and expectations for additional spending. I have consistently stated that we can only spend the resources we have and the best way to sustain our public finances is to keep the Government finances in balance. This Government is fully committed to meeting our international obligations under the EU Stability and Growth Pact and in An Agreed Programme for Government we explicitly stated that it provides the overriding framework for our fiscal policy. Under the pact, Ireland has given a sovereign commitment to keep the finances of general government close to balance or in surplus and to take corrective action when there is an actual or expected divergence from this objective.