Dáil Éireann Debate, Tuesday - 16 December 2014
196. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which positive developments in the economy may be reflected throughout the public and private sectors in the next 12 months; and if he will make a statement on the matter. [48468/14]
Amharc ar fhreagraThe Government's principal strategy in recent years has been to put the public finances on a stable footing as a precondition to the continuation of economic growth.
Estimates of economic activity for the third quarter of this year saw GDP growing by 0.1 per cent over the quarter and by 3.5 per cent year-on-year. Although this represents a slowdown on the exceptionally strong first half of the year, GDP still grew by close to 5 per cent year-on-year in the first half of this year.
On a full-year basis, the increase in economic activity is broadly-based with both domestic sectors and exporting sectors performing strongly. Importantly, domestic demand is continuing to grow, with consumption and investment up in the first three quarters of the year. Exports continued their strong performance up 15.5 per cent year-on-year, the strongest growth since 2001.
Recovery is perhaps most clearly evident in the labour market, with employment having increased in each of the last eight quarters, representing a net increase of nearly 85,000 jobs since the low-point in mid-2012. It is expected that employment will continue to increase and that unemployment will continue to fall steadily, to an average of 10.2 per cent next year.
Growth in the euro area is essential for sustained growth in Ireland. The sluggish growth being recorded in the euro area at the moment remains of concern. Notwithstanding that, Ireland has out-performed other EU Member States in recent quarters due in part to the competitiveness improvements achieved in recent years, as well as to Ireland's economy being more closely linked than those of other euro area countries to the UK and US economies. The Department of Finance is forecasting GDP growth of 4.7 per cent this year and 3.9 per cent in 2015. According to recent forecasts by the European Commission, Ireland is set to record the fastest rate of GDP growth in the EU this year and in 2015.
In terms of the public finances, policy measures implemented by the Government have resulted in a decline in Ireland's deficit in recent years. This decline has been managed in a phased manner, consistent with the dual needs of supporting domestic activity as well as repairing the public finances. All of Ireland's interim deficit ceilings under the Excessive Deficit Procedure have been met and, as a result, Ireland is firmly on track to achieve a deficit of below 3 per cent in 2015. This fall in the deficit has been important in restoring Ireland's credibility in the international markets; bond yields have fallen substantially since the high rates of mid-2011. The debt ratio has peaked and is now on a downward path.
