As set out in the recent Stability Programme Update (SPU), the Irish economy is in an unusual position at the moment, with a slowdown in key export markets on the one hand and possible domestic overheating and capacity constraints on the other. In addition, Brexit is of course a significant risk and source of major uncertainty. While this is challenging, it is important to note that we are in a strong position from which to meet that challenge. Provisional figures indicate that Ireland’s GDP grew by 6.7 per cent in 2018. This is a healthy pace of growth, which is being reflected in our labour market. Indeed, according to latest CSO figures, the seasonally adjusted unemployment rate for May 2019 was 4.4%, down from 5.9% compared to same point in 2018. However, given the risks I have noted, now is the time for sustainable expenditure policy that is affordable now and into the future.
A key challenge is to ensure that Departments manage expenditure each year within the allocations voted by Dáil Éireann. In this regard, measures are in place to ensure that our expenditure and budgetary targets are being achieved on an ongoing basis. Managing the delivery of public services within budgetary allocations is a key responsibility of each Government Minister and Department. The Department of Public Expenditure and Reform is in regular contact with all other Departments and Offices to ensure that expenditure is being managed within the overall fiscal parameters. There is regular reporting to Government on expenditure levels and expenditure profiles are published for each month. The drawdown of funds from the Exchequer is monitored throughout the year and reported on against profile on a monthly basis in the Exchequer Statement.
As set out in the most recent Fiscal Monitor, published by the Department of Finance, total gross voted expenditure at end-May 2019 was €26,066 million. This is €145 million, or 0.6% below profile. Gross voted current expenditure of €24,184 million, is €65 million, or 0.3% below profile. Of the 17 Ministerial Vote groups, 12 are on or below profile on current expenditure for end-May. Gross voted capital expenditure of €1,833 million, is €81 million, or 4.1% below profile and up €454 million, or 31.8% on the same period last year. While this is encouraging, there is a particular challenge in the Health sector, where the year-on-year increase to the end of May illustrates the challenge and the need for staffing and savings measures to be proactively managed by the Department of Health.
Work is underway on the Summer Economic Statement (SES) 2019. In setting out the Government’s overall fiscal strategy in the SES, I will take into account recent developments, in particular in the external environment, and will consider the points raised by the Irish Fiscal Advisory Council in its recent fiscal assessment report.