Our expenditure is well in excess of our revenues and this gap, currently being filled by borrowing, needs to be reduced to a sustainable level. This is not just to ensure we retain market confidence but also because it is sensible economic policy. The more we borrow, the higher the cost of servicing our debt and the fewer resources we have to direct elsewhere. My Department monitors continually the economic and budgetary position and data are constantly being assessed as they emerge. In this regard, I am kept fully informed of emerging trends. Based on data that became available over the summer months, in addition to second-quarter economic data published by the CSO in September, which were disappointing, a downward revision of future growth prospects was warranted.
With regard to when I became aware that a larger adjustment than that signalled at budget time last year might be necessary, this gradually became clearer as more economic data emerged. This development, coupled with the clarification on 30 September of the extent of support required for the banking sector and a further refinement of economic forecasts, led to a strengthening of the view that additional consolidation would be required if the 3% deficit target were to be achieved by 2014.
I outlined in my statement on banking in this House on 30 September that the Government's commitment to adhering to the 3% of GDP deficit reduction target by 2014 had not changed and I made it clear that we would make an additional significant consolidation effort in 2011 over and above the already announced target of €3 billion. As the Deputy is aware, towards the end of October I announced that an overall adjustment of €15 billion over the next four years is warranted to achieve the target deficit of 3% of GDP by 2014. During October, my officials briefed Opposition spokespersons on the emerging trends based on various economic and budgetary scenarios. Furthermore, my Department set out last week the up-to-date economic and budgetary position including the scale of the 2011 adjustment and the likely annual breakdown based on current assessments.
Achieving, in a fair and sensible manner, the necessary next step in the multi-annual adjustment is what Government is now focusing upon and we will publish our four-year budgetary plan later in the month.