Jonathan O'Brien
Question:78. Deputy Jonathan O'Brien asked the Minister for Finance if he will address matters (details supplied) regarding calculations. [28860/18]
View answerTuesday, 3 July 2018
Questions (78)
Written answers
As the Deputy is aware my Department has not prepared any forecasts beyond 2021 and therefore cannot provide ratios of GDP and GNI* for these years.
The Deputy provided a proposed capital expenditure plan and has requested this as: per cent of GDP; per cent of GNI*; and additional fiscal space used compared with Table 3 of the 2018 Summer Economic Statement (SES).
Nominal GDP and GNI* projections are included in annex 2 of the Stability Programme Update 2018. Using these gives the following ratios:
|
2019 |
2020 |
2021 |
|
|
Proposed Capital Expenditure (€ million) |
8,800 |
9,300 |
9,800 |
|
per cent of GDP |
2.7 |
2.7 |
2.7 |
|
per cent of GNI* |
3.9 |
4.0 |
4.0 |
In comparison to table 3 of the 2018 SES a baseline increase to capital expenditure of €1.5 billion, €1.4 billion and €1.2 billion would use a further €0.4 billion, €0.7 billion and €1.0 billion of fiscal space in 2019 - 2021 respectively.
This is based on the assumption that the increases are all gross fixed capital formation and that all other variables remain unchanged.
As I have said, such increases represent money that we would have to borrow. We have one of the highest debt per capita ratios in the developed world. There is general recognition that sovereign borrowing costs are going to rise. So borrowing even more and adding to our debt pile is reckless - especially in view of the major risks to the economy at present. Budgetary policy will be formulated to ensure continued steady improvements in Irish employment and living standards.