asked the Minister for Finance the estimated growth rate for the calendar year 1980; and the basis for the compilation of this estimate.
24.
Ceisteanna—Questions. Oral Answers. - Growth Rate.
23.
asked the Minister for Finance whether, in the light of the most recent NESC report, the forecasts of the ESRI and the central Bank and the latest published figures on the volume of retail sales, he is confident that, as the Taoiseach stated recently, there will bear a growth rate of two per cent in the economy during 1980.
I propose, with the permission of the Ceann Comhairle, to take questions Nos 23 and 24 together.
I am confident that the growth rate of gross domestic product this year will be of the order of 2 per cent. This estimate is based on an assessment of trends to date and expected developments in the expenditure components of GDP.
Was there not drop of 5 per cent in retail sales up to August?
Yes.
How, then, can there be a growth rate of 2 per cent in GNP?
The Deputy will be aware that retail sales are only a small element of GNP.
They are a very significant element of GNP.
The Deputy will be aware also that there has been an increase of 20 per cent in exports, for instance, in the same period.
That is because we are selling seed potatoes.
It is due to de-stocking on the part of farmers.
That is not so.
Would the Minister agree that personal consumption is the biggest single component of GNP, representing about two thirds of GNP?
In reply to Deputy Barry's question, I have said that there was an increase of 20 per cent, not all of which by any means related to de-stocking in farming. There was a significant increase in industrial exports.
Is the Minister saying that two-thirds is an insignificant element and would he agree that personal consumption represent this proportion of GNP?
I would not agree.
What is the percentage, then?
It depends always on the level of activity in the economy and, as the Deputy will appreciate, on the level of exports. Therefore, there is no golden rule on this.
Would the Minister not agree that the figure ranges between 60 and 70 per cent?
I may so range.
Why did the Minister say only a minute ago that retail sales represent only a very small proportion of GNP?
The Minister is trying to fool us. Why is he estimating a growth rate of 2 per cent when the Central Bank, who are an independent and impartial body and not politically motivated have estimated a nil percentage growth?
Only yesterday the EEC estimate was for less than 1 per cent in this regard.
As the Deputies have been in the business of estimating and forecasting for some time they will be aware that this task is now more hazardous than it was before. The Department of Finance have what they regard as very reliable criteria on which to estimate.
Since early spring independent forecasts have been coming from the Central Bank, from the ESRI, from the CII and from a whole range of private firms in the business of stockbroking, of advising clients and so on. Does the Minister know of one of these independent organisations who have forecast a growth rate of anything of order of 2 per cent?
I can only tell the Deputy that my responsibility is to act on the analysis conducted by my advisers and experts and to plan accordingly. I am quite satisfied that the information I have given is correct and I can say equally that we are exceptional in Europe in that we are perhaps the only country at this stage who have the degree of projectional growth to which I have referred.
We are way below the EEC level.
Only a moment ago the Minister described the business of forecasting as hazardous. How can he say now that he is perfectly certain of his estimate?
The words I used were "quite satisfied".
A final supplementary from Deputy Barry.
Do I understand the Minister to say that he is relying on the advice of the Department of Finance for this 2 per cent figure?
Apart from the data, the material and the resources available to them, they have regard to what is available to the other sources from which they draw.
Are these the same people whose estimates for expenditure this year were out by more than £500 million, thereby necessitating the supplementary estimates that we have had here in the past month?
Though we did not meet all the requests from the other side which related mostly to current expenditure, the Supplementary Estimates that were introduced were mostly by way of deliberate Government decision in respect of infrastructural development programmes — this included the £100 million announced some time ago — and also farm relief programmes. The Deputies opposite will have to make up their minds as to whether they are for or against such action.
Would it not be better ——
I have allowed about 12 supplementaries on this question. We must move on.
——for the Minister to make up his mind at the beginning of the year and to estimate accordingly?