Dáil Éireann Debate, Wednesday - 26 July 2017
204. Deputy Thomas P. Broughan asked the Minister for Finance the way in which the figures for the reference rate and convergence margin were arrived at in each of the years 2018 to 2021 in the recent summer economic statement 2017 published by his Department; and if he will make a statement on the matter. [36450/17]
View answerThe reference rate and convergence margin for next year were set by the European Commission in its Spring forecast published in May of this year.
The process by which these figures are arrived at are detailed in the 2017 Edition of the Vade Mecum on the Stability and Growth Pact as well as the documentation published by my Department (table A7) in October last year as part of the Budget for this year.
The reference rate is a ten-year average of the potential growth rate of the economy, comprising backward- and forward-looking elements.
The convergence margin is calculated on a country-specific basis for countries who have not yet reached their Medium Term Budgetary Objective (MTO). It is designed to ensure that the MTO is achieved in a suitable manner, and takes into account the share of Government Primary Expenditure in GDP.
