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Dáil Éireann díospóireacht -
Wednesday, 24 Oct 2001

Vol. 542 No. 6

Written Answers. - Budget Surplus.

Michael Bell

Ceist:

117 Mr. Bell asked the Minister for Finance the anticipated budget surplus at the end of 2001; the amount of surplus he predicted in his last budget; the anticipated level of economic growth for 2001; the figure for growth he predicted in his last budget; the implications of the reduced budget surplus and growth for the economic situation; and if he will make a statement on the matter. [25340/01]

In Exchequer terms, the budget day forecast was for a surplus of 3,222 million, or £2,538 million, which was equivalent to 3.3% of GNP. The end of September forecast was that the Exchequer surplus would be at least 1.9 billion, or £1.5 billion lower than the budget day forecast and possibly significantly more. These Exchequer figures exclude the proceeds from the new voluntary disclosure scheme and the sales of the TSB and the ICC.

Last December, the forecast for 2001 economic growth, published in conjunction with the budget, was for an increase of 8.8% in GDP and of 7.4% in GNP. My Department's most recent forecast for 2001 economic growth, published in economic review and outlook, is for an increase of 7.2% in GDP and an increase of 6% in GNP. This forecast was prepared in August 2001 and, therefore, does not take account of the impact of the events of 11 September in the United States on global and domestic economic activity. It is very difficult, just a month after the events to assess the full economic impact of the attacks on Ireland's economic growth. Obviously much depends on the effects on the world economy as a whole and on reactions to the ongoing military response. My Department will as usual publish its estimates for economic growth with the budget.

The economic environment has clearly altered radically compared to this time last year. Obviously a reduced tax base has implications going forward for increased tax revenue, for surpluses and for debt. These factors are being examined in the context of the forthcoming budget.

Policy at this juncture must be geared towards ensuring that, when the international economy recovers, Ireland is positioned to benefit fully from that recovery. I am satisfied that in the medium term, as the global economic environment recovers, we can achieve satisfactory levels of growth which will benefit us all.

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