Dáil Éireann Debate, Thursday - 28 February 2013
31. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he can foresee an improvement in economic growth over the next two years with particular reference to the need to use such growth as a means of reducing debt to GDP ratios and keeping in mind the need for continued reduction in the current budget deficit; and if he will make a statement on the matter. [10590/13]
View answerMy Department published its latest economic and fiscal outlook at budget time on 5 December 2012. At that time, GDP was forecast to grow by 1.5 per cent in real terms this year, with growth of 2.5 per cent projected for next year. As the Deputy will be aware, the fiscal projections outlined in Budget 2013 point to a steady improvement in the General Government deficit over the coming years. Annual deficit limits, as set by the ECOFIN Council in December 2010 will be achieved and the deficit is projected to be below 3 per cent of GDP by 2015. The Budgetary projections assumed that the debt-to-GDP ratio would peak this year and fall from next year.
The Government’s focus is on stabilising the General Government debt to GDP ratio and beginning the process of reducing it to a lower, safer level over time. Indeed, I would point out that recent financial asset sales - namely contingent convertible capital in Bank of Ireland and Irish Life - will, with all other things being equal, have a favourable impact on General Government Debt this year.
Revised macro-economic and budgetary projections will be published in the Stability Programme Update in April. At this stage, I would stress that we remain on track on the fiscal front both in terms of reducing the deficit and putting the debt ratio on a declining path.
