Terence Flanagan
Question:64. Deputy Terence Flanagan asked the Minister for Finance when he expects to achieve a balanced budget here; and if he will make a statement on the matter. [2032/14]
View answerThursday, 16 January 2014
Questions (64)
Written answers
In the short term, fiscal policy in Ireland will continue to be driven by our obligations under the corrective arm of the Stability and Growth Pact, namely to bring the headline deficit below 3% of GDP by 2015. Notwithstanding the legal requirement to comply with the recommendations issued as part of the excessive deficit procedure, it is imperative in its own right that we bring our deficit down to more sustainable levels.
On the basis of the economic and fiscal projections contained in Budget 2014, as well as developments in the period since then, it is clear that we remain on track to correct our excessive deficit in a timely manner.
Once the excessive deficit has been corrected, the public finances in Ireland will be subject to the requirements of the preventive arm of the Pact and those of the Treaty on Stability, Co-ordination and Governance (TSCG). Essentially these involve being at or adjusting sufficiently rapidly towards our (country-specific) medium term objective (MTO), which is for a balanced budget in structural terms. From 2016 onwards, therefore, the general government deficit, after adjusting for the impact of the economic cycle and one-off factors, is required to converge at a sufficiently rapid pace towards balance.
The Medium-Term Economic Strategy, published last December, contained economic and fiscal projections covering the period 2014-2020. These projections were based on an estimate of Ireland's potential output; on the basis of these growth assumptions and continued fiscal prudence, a balanced budget is set to be achieved in 2018, in compliance with our obligations.