Vol. 425 No. 8
14 Mr. Barry asked the Minister for Finance the growth rate in our economy for 1992; if the ESRI estimate of 2.25 per cent is correct or whether the Central Bank's winter commentary which estimated economic growth for 1992 at 1.5 per cent is more reliable; and if he will make a statement on the matter.
My Department's current estimate of (GNP) growth in 1992 is rather closer to the 1.5 per cent estimated by the Central Bank. The Department's detailed preliminary assessment of 1992 will be incorporated, as usual, in the documentation accompanying the forthcoming budget. The House will understand that estimates of 1992 growth are necessarily quite tentative at this stage and that therefore no estimate could be described as correct or incorrect.
(Limerick East): Around what projected growth rate for 1993 is the Government constructing the budget?
The detailed figures will be published in the normal way, in the Economic Outlook on the Budget. The Minister will be giving a detailed outline of the budgetary situation in his Budget Statement. At this stage, firm figures are not available. This is the reason for the difference between the Central Bank's estimated outturn for 1992 and the ESRI's figures. We do not yet have any kind of hard information on the net factor flows in 1992. Currently we feel it would be of the order of 1.5 per cent as given by the Central Bank.
(Limerick East): I asked about 1993.
I am sorry, I misheard the Deputy. I thought he asked about 1992.
(Limerick East): No, the projections for 1993 on which the budget will be based.
That information will be in the budget speech.
(Limerick East): Do I take it that the Book of Estimates will be published on the 17 February and the Government has not yet decided what is their projected growth rate for 1993?
The Government is reviewing the figures on the growth rate, as the Deputy will appreciate, following the devaluation of the currency last Saturday week. The economic projections are being revised in the light of the information. For example, it is anticipated now that the unemployment figure will be somewhat less than had been envisaged in the original projections. Obviously the forecasts in relation to imports and exports, which were a central feature of economic forecasting, are being revised in the light of the changing economic circumstances in the budget speech. Details will be given then. The situation is being kept under review from day to day and the budgetary arithmetic is being examined in the light of the current growth figures.
I am staggered that there are no figures but I will not make any comment. The EC, which probably has bigger problems doing sums, suggests that in 1993 the forecast growth rate for the Community at large will be only .075 per cent and it predicts, as a result, a further growth in unemployment in the EC. By what means can the Minister come to this House and suggest to us that any reasonable projection for Ireland is likely to see unemployment decline rather than grow?
I said that the original forecasts for 1993 which had been prepared in the Department of Finance have been adjusted in the light of the devaluation because that affects such items as imports and exports. As the Deputy knows, exports account for roughly 70 per cent of demand in the Irish economy. Those export figures and projections are being adjusted because of devaluation. That adjustment currently means that the anticipated unemployment figure a month ago for 1993 is now lower. The EC have again adjusted their own growth forecast downward and obviously the Department officials in preparing economic projects have to keep an eye on our trading partners' situation and build into our own projections adjustments based on adjustments made by our trading partners and other member states' projections. The Deputy will appreciate that we are not dealing with something that can be written down on tablets of stone. The whole picture has been, will continue to be assessed and will form part of the whole budget assessment process.
It strikes me as a bit strange that in the latest budget in recent memory we are not able to agree an indicator as large as this one at this stage. The Minister earlier said and I quote: "The national lottery is not raking in the shekels this year like last year". Can this be taken as an indicator for economic growth for 1993?
No. I think it should be taken as a change in spending patterns by consumers.
(Limerick East): The Minister of State is probably aware that the Minister for Finance, Deputy Ahern, indicated yesterday that the impact of devaluation on the budget would be slightly negative. It seems to me that he had to factor in a growth rate on the model to come to that conclusion. Could the Minister of State inform the House what growth rate the Minister factored in when he came to the conclusion that the budgetary effect would be slightly negative?
They are doing new runs on the model all the time to factor in the various changes as they come in. The Minister for Finance will be in a position to give his final forecast in his budget speech and that will be available to the House in just under two weeks' time, if the Deputy will have a little patience.
An admonitory tone that we do not like.
