asked the Minister for Finance whether the Government have formed an estimate of the economic growth achieved in 1978, and, if so, what their estimate is.
Ceisteanna—Questions. Oral Answers. - Economic Growth.
13.
The Government's estimate of economic growth in 1978 was published in the White Paper Programme for National Development 1978-1981, and in Economic Background to the Budget, that is, about 7 per cent.
Is the Minister aware that the estimate arrived at by the Central Bank differs from his estimate by 1.2 per cent—quite a large difference in the small scale of the figures we are talking about?
If the Deputy is talking about estimates from other bodies he will be aware that there are estimates also from such bodies as the ESRI, OECD and so on, which differ considerably from the estimate of the Central Bank.
Would the Minister accept that there is a difference in contrasts in the figures delivered by the ESRI and OECD on the one hand and by the Central Bank, which is an arm of State, on the other hand? Would he explain how he reads the fact that his Department can claim a figure of 7 per cent while the Central Bank say the figure is 5.8 per cent?
The Deputy will know that the Central Bank's estimate was made a considerable time ago. Consequently, the Central Bank could not have been aware of a number of factors of which the Government were aware with the availability of information at the end of the year. In particular the Central Bank did not take account of the fact that retail sales were buoyant in October and November. Neither did the Central Bank have the full year's figures for investment. Imports of producer capital goods were up by 30 per cent in value with an estimated volume increase of 20 per cent. This is a good indicator of the growth rate of investment in plant and machinery. The volume of cement sales which is a good indicator of the investment in building was up by more than 15 per cent. This kind of information was not available to the Central Bank when their forecast was made.
Is the Minister suggesting that if the Central Bank were to produce the figure now, it would be in line with the Government's figure of 7 per cent?
I cannot suggest what either the Central Bank or any other body would produce. I can only indicate, as I have indicated, that the estimate referred to was made by the Central Bank without access to the information to which I have referred.
When is the first non-political estimate from the CSO expected to come to hand?
Later this year.
How much later?
Not before April. The preliminary national accounts for 1978 prepared by the Department of Finance in consultation with the CSO will appear in Economic Review and Outlook about the middle of the year. Definitive national accounts will not be published by the CSO until April 1980.
Is it the position that in the meantime the figures are those of the Minister's Department and of the Department of Economic Planning and Development which are known to differ widely from the non-political figures of the CSO and have been shown to do so in the past?
I do not accept that at all. The Deputy is aware that the definitive figures from the CSO do not appear for some years later. In fact, it was only last year that I received the definitive figures on growth in 1973 which, as the Deputy will recall, he used to boast about although he was responsible for only part of the year. It transpired that the year of biggest growth up to that time was 1972, not 1973. This came to light only last year.
Does the Minister know of any other instance in the European Community or in Western Europe generally in which a Government and their Central Bank can produce differing figures in regard to the growth rate for a particular year which has passed? This review was produced in January this year, not long before the budget.
Question No. 14.
May I reply to the Deputy?
You may reply, but it is a separate question.
I must point out again that economic forecasters in a Government Department, the Central Bank, the ESRI or anywhere else have to operate on certain assumptions and on certain factual data available and, depending on those assumptions, they can arrive at different conclusions. If forecasts are made on the basis of information then available and if further information subsequently becomes available which changes the picture, then it is inevitable that there will be differing forecasts.
We are not talking about forecasts; we are talking about the analysis and interpretation of a year which is passed. I know this Government do not find it too easy to distinguish between a forecast and an analysis of something which is passed.
If in the autumn of 1978 people are trying to estimate growth for 1978, does the Deputy not recognise that they are making forecasts?
I have listened to the Minister's explanation with regard to the end of the year consumption and imports, but I am still asking if the Minister will recognise the dilemma of some bank or other institution outside this country trying to form an estimate of the underlying strength of the economy and finding that within a matter of weeks the Government and the Central Bank bring out widely divergent figures in regard to the year's growth. Will the Minister undertake in view of this discrepancy to issue a public statement which will be signed also by the bank, on the board of which he has nominees, to explain this discrepancy, perhaps in the terms he has used or, if possible, in more detail?
I will do no such thing and the Deputy knows there is no such necessity. Nobody outside this country of the kind referred to by the Deputy has any difficulty whatever in ascertaining what the position is. Furthermore, the Deputy knows that it is by no means unprecedented for differing views to emerge between the Government of the day and the Central Bank of the day with regard to the performance of the economy or forecasts as to how it will perform.
Will the Minister not agree that the scale of the difference in the figures far transcends anything that can conceivably be accounted for by figures in respect of the closing weeks of the year for two elements, imports and retail sales?
I certainly do not and I will be dealing with that in more detail tomorrow in replying to the budget debate. I hope Deputy FitzGerald will be here because there are one or two things I should like him to hear and maybe he might briefly answer a question or two.
That sounds fun.
The Government had better be on their toes in case they make another mistake.