Vol. 542 No. 6
104 Mr. Broughan asked the Minister for Finance his views on the medium term review published by the ESRI in September 2001; his views on the forecasts made in the review for economic growth and employment levels; and if he will make a statement on the matter. [25342/01]
The ESRI's medium term review provides a useful framework for analysing the likely economic conditions over the medium term. The latest MTR contains two broad scenarios – the benchmark forecast and a slowdown scenario. Under the benchmark forecast, the economy slows gradually to trend growth with annual GNP growth averaging 4.8% over the period 2000-2005. Annual employment growth under this scenario averages 2% over this period.
Under a less benign slowdown scenario, which the ESRI suggests may be closer to reality in prevailing circumstances, it is assumed that the economy is hit by a shock which causes output and employment growth to decelerate more rapidly over the short term. While unemployment is seen to rise, both output and employment growth recover over the medium term.
I also take the view that, with the right approach, the Irish economy can pass through these short-term difficulties and, as the global environment recovers, achieve satisfactory levels of economic growth. In line with current practice, my Department will publish revised forecasts for the period 2002-2004 on budget day, 5 December.
