Pearse Doherty
Question:113. Deputy Pearse Doherty asked the Minister for Finance the projected impact of a no-deal Brexit on the structural balance from 2019 to 2024, in tabular form. [14978/19]
View answerTuesday, 2 April 2019
Questions (113, 115, 120)
Pearse Doherty
Question:115. Deputy Pearse Doherty asked the Minister for Finance the projected structural balance for 2019 to 2024 or the latest available date in each of the major Brexit scenarios forecast by his Department. [14981/19]
View answerPearse Doherty
Question:120. Deputy Pearse Doherty asked the Minister for Finance the projected cyclical budgetary component for each year from 2019 to 2024; if a breakdown of the components of same will be provided; and if the same data for different Brexit scenarios will be provided in tabular form. [15217/19]
View answerWritten answers
I propose to take Questions Nos. 113, 115 and 120 together.
The most recent published estimates for the cyclical budgetary component and the structural balance were included in Budget 2019 (see Table). At Budget time, it was estimated that, adjusting for the impact of the cycle, the structural budget balance would be broadly in line with the achievement of the medium-term objective (MTO) in 2019.
Last month, research was published under the joint Department of Finance, Revenue Commissioners and ESRI Research Programme, titled ‘Ireland and Brexit: Modelling the Impact of Deal and No-Deal Scenarios’. This highlighted a number of Brexit scenarios and ranges for the impact on the General Government Balance (GGB). Under the ‘No Deal’ medium run scenario, the report pointed to a deterioration of 0.4 per cent of GDP in the GGB. However, the report did not publish estimates for the output gap nor cyclically adjusted aggregates which are components of the structural balance.
Table: General Government and Structural Balance Forecasts from Budget 2019
|
As per cent of GDP |
2018 |
2019 |
2020 |
2021 |
2022 |
2023 |
|
General Government Balance |
-0.1 |
0.0 |
0.3 |
0.4 |
1.1 |
1.4 |
|
Cyclical Budgetary Component * |
0.9 |
0.7 |
0.3 |
0.2 |
0.1 |
0.0 |
|
Structural Balance * |
-1.0 |
-0.7 |
0.0 |
0.2 |
1.0 |
1.4 |
* based on the European Commission’s ‘harmonised’ production function approach for estimating the output gap
My officials are currently engaged in preparing new macroeconomic and public finance forecasts for the forthcoming 2019 Stability Programme Update (SPU), which will be published in mid-April. These will include forecasts for the structural budget balance reflecting end-2018 outturns and new assumptions and forecasts regarding the outlook for the Irish economy, including the international environment.