Against the potential challenges we face it is imperative to boost the resilience of the Irish economy in order to minimise – in so far as is possible – any future disruption brought on by potential international developments, including the UK’s departure from the European Union. This is why eliminating the budgetary deficit forms a key part of the Government’s policy response. Accordingly, in the recently published Budget 2019, I announced a balanced budget for next year. Thereafter we will see a return to surplus, better positioning the public finances to face into any uncertainty.
Our debt ratio has continued to improve. Having stood at 111 per cent of GNI* in 2017, this is forecast to reduce further to 105 per cent in 2018 and 101 per cent in 2019. While this still remains elevated, provided we continue to adopt the correct policy choices, this is on an improving trajectory. At the same time, the Government is committed to using receipts from the resolution of the financial crisis for public debt reduction.
The MTO is broadly achieved next year, again standing the public finances in good stead to help withstand any potential future shocks. Separately the Government is also establishing a Rainy Day Fund in order to create a fiscal safety buffer to help absorb inevitable future shocks to our economy, while at the same time ensuring the long-term sustainability of Ireland’s public finances.
Finally, my Department will continue to monitor fiscal developments very closely during 2019.