Liz McManus
Question:136 Ms McManus asked the Minister for Finance if he will make a statement on the economic overview set out in the recently published Annual Report of the Central Bank. [14494/02]
Written Answers. - Economic Overview.
The Central Bank, in its annual report for 2001, is forecasting real GNP growth of around 3% this year, with a return to trend growth of 4.5% to 5% envisaged over the medium term. The budget day figures were based on GNP growth of 3.5% this year, with the economy returning to around its medium-term trend growth rate from 2003 onwards.
The bank believes a significant risk to the resumption of trend growth is the current evolution of Irish inflation, which, if sustained, could threaten the competitiveness of the economy, a scenario that would be exacerbated in the event of a significant euro appreciation. The competitiveness of the economy would also be threatened by unsustainable levels of wage and other cost increases, which would ultimately lead to job losses.
In this regard I share the Central Bank's concern regarding competitiveness. It is imperative that wage increases, and the evolution of costs more generally, are brought down to those in our major trading partners.