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Economic Growth Rate

Dáil Éireann Debate, Thursday - 14 January 2016

Thursday, 14 January 2016

Questions (21)

Richard Boyd Barrett

Question:

21. Deputy Richard Boyd Barrett asked the Minister for Finance given warnings by bodies such as the International Monetary Fund of a likely global recession, growing signs of a slowdown in the global economy and the stock market crisis in China, if his growth projections over the coming number of years are realistic; and if he will make a statement on the matter. [1344/16]

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Written answers

My Department's latest forecasts, which underpin Budget 2016, are set out in the Economic and Fiscal Outlook, published as part of the Budget 2016 documentation. They project GDP growth of 6.2 per in 2015 and 4.3 per cent in 2016, with an average growth rate of around 3 per cent for subsequent years. This forecast takes account of the most recent IMF and OECD forecasts at the time of the Budget - which continue to project growth in our main trading partners, although they do identify risks to this scenario.

The text in the Budget documentation explicitly recognises that outside of Ireland's main export markets the pace of economic expansion has slowed and the outlook has become increasingly uncertain. The text also notes that while the spillover effects to Ireland's main trading partners appear to have been limited to date, a more pronounced impact cannot be ruled out. The Budget documentation also sets out a detailed analysis of risks which are described as being titled to the downside.

The Deputy will already be aware that these forecasts were endorsed by the Irish Fiscal Advisory Council and also, that in its recent Fiscal Assessment Report, the Irish Fiscal Advisory Council welcomed the Department's view of the balance of risks and noted that it represented an important input into discussions around the macroeconomic and fiscal outlook.

However  despite the disappointing data flow in emerging market economies, Irish export growth was indeed very strong in 2015, with year-on-year growth of over 13 per cent recorded for the first three quarters of the year compared with the same period in 2014. Recent high frequency data releases point to continued strong growth in the fourth quarter in both the manufacturing and services side.

Overall I am confident that these forecasts are realistic, and take due account of risks which are explicitly recognised. 

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