I propose to take Questions Nos. 71 and 91 together.
As have been said on many occasions, macroeconomic forecasting is not an exact science. Growth forecasts are subject to ongoing revisions irrespective of what institution — domestic or international — is conducting the exercise.
My Department's latest economic forecasts are set out in the 2012 Stability Programme Update (SPU), which was published on April 27. GDP is projected to grow by 0.7 per cent this year, with growth of 2.2 per cent foreseen for next year.
These forecasts take account of the preliminary national accounts estimates for the third and fourth quarters of last year, along with the preliminary 2011 estimate and other information that became available between Budget time and late April.
My Department's view that economic activity will expand again this year, and strengthen next year, is shared by other forecasters, both domestic and international. Indeed, the figures published yesterday by the OECD assume GDP growth of 0.6 per cent this year and 2.1 per cent next year, which are broadly in line with those presented in the SPU. At present, the range of GDP growth forecasts for 2012 extends from 0.5 per cent (the consensus) to 0.9 per cent (the ESRI), with the Department of Finance's projection in the middle. The Department's growth forecast for next year is also roughly mid-way.
The growth forecasts set out in the SPU remain valid at this time. That is not to say that there are not risks. There clearly are. A number of downside and upside risks were identified in the SPU and remain valid at this juncture. Given the current heightened uncertainty, my Department is closely monitoring the economic situation and the risks to its growth forecasts, and will continue to do so over the coming weeks and months.
