Dáil Éireann Debate, Thursday - 4 October 2012
66. Deputy Dessie Ellis asked the Minister for Finance the plans, if any, he has to conduct and publish analysis of the net effect on gross domestic product and gross national product of the measures taken in Budget 2012; the plans the Government has to conduct and publish any analysis of the output effects; and if he will make a statement on the matter. [42278/12]
Amharc ar fhreagraThe Government framed Budget 2012 in such a way as to make it as growth-friendly as possible. As I stated on Budget day last December, Budget 2012 balances the need to restore confidence in Ireland's fiscal position with the key objective of supporting economic growth that delivers jobs. Budget 2012 implemented the necessary corrections to keep Ireland on track with our fiscal targets to bring down the deficit and stabilise public debt. While the short-run impact of fiscal consolidation may see a reduction in economic output, over the medium term there can be positive effects such as increased confidence and a reduction in the risk premium as the deficit is reduced and debt is put on a declining path. In addition, it must be recalled that Ireland is a small, open economy with imports comprising a large share of final demand. This means that a substantial part of fiscal consolidation leaks out of the economy in the shape of lower imports.
Despite large consolidation efforts in recent years GDP growth of 1.4% was recorded in 2011 and almost all commentators are agreed that GDP will increase again in 2012. This performance is bringing benefits in the form of a fall in bond yields in recent months and successful re-engagement with the markets by the NTMA.
My Department will publish its next set of economic and fiscal forecasts later this month.
