Dáil Éireann Debate, Tuesday - 15 November 2011
46 Deputy Brian Stanley asked the Minister for Finance the impact of half a per cent growth reduction in 2012, 2013, 2014 and 2015 from the growth projections contained in the mid-term financial review; and the impact this will have on our debt to GDP ratio in 2012, 2013, 2014 and 2015; and if he will make a statement on the matter. [34443/11]
View answerThe Deputy should be aware that Chapter 5 of the Medium-Term Fiscal Statement sets out a range of different scenarios which show the estimated impact on the General Government debt/GDP ratio of both higher and lower nominal rates of economic growth. These are summarised in the table below:
|
General Government Debt (% of GDP) |
2012 |
2013 |
2014 |
2015 |
|
Base Case |
114.3 |
118.3 |
117.0 |
113.5 |
|
Nominal GDP Growth 1% Lower |
116.1 |
122.1 |
123.4 |
123.0 |
|
Nominal GDP Growth 2% Lower |
117.7 |
126.1 |
130.1 |
132.9 |
|
Nominal GDP Growth 1% Higher |
112.8 |
114.6 |
110.8 |
104.5 |
|
Nominal GDP Growth 2% Higher |
111.2 |
110.9 |
104.7 |
95.9 |
47 Deputy Pádraig Mac Lochlainn asked the Minister for Finance the nominal GDP assumptions for Q3 and Q4 2011 that are used in the mid-term financial statement; and if he will make a statement on the matter. [34448/11]
View answer60 Deputy Pádraig Mac Lochlainn asked the Minister for Finance the real GDP assumptions for Q3 and Q4 2011 that are used in the mid-term financial statement; and if he will make a statement on the matter. [34447/11]
View answerI propose to take Questions Nos. 47 and 60 together.
Quarterly Irish economic data can be very volatile and are subject to non-negligible revisions. This was evident once again in the latest Quarterly National Accounts release, which revealed that, on a seasonally adjusted basis, real GDP grew by 1.6 per cent quarter on quarter in Q2 2011 following positive growth of 1.9 per cent in Q1 2011. The previous estimate for the first quarter of 2011 was 1.3 per cent growth.
Given this volatility, my Department's growth forecasts are based on annual rather than quarterly figures. This is in line with the approach of others, including the Central Bank and ESRI. On this basis, my Department's latest forecasts — set out in the Medium-Term Fiscal Statement which was published on 4 November — are for real GDP growth of 1 per cent this year and a contraction of 0.5 per cent in nominal GDP. For the year as a whole, the level of GDP is projected to be €155 billion.
