Mr. John McCarthy:

We will now focus on the key chart, which contains our forecasts for the main macro variables on the real side, as well as labour market variables, and on the nominal side also. For this year we are looking at real GDP growth of about 0.2%. We just got the figures this morning and the consensus is that it will be zero for the year as a whole, a minor difference. It must be borne in mind that in an economy like Ireland, where figures are very volatile, there is very little difference between +0.2% and zero. I would not call that a really strong difference. Crucially, in the outlook for 2014, I mentioned at the outset that we are looking at output growth of 1.8%, which is a downward revision, because at the time of the SPU last April we were looking at GDP growth of 2.4%. The main reason for the downward revision is a fall in exports, which was partly due to the very weak international economy in the opening quarter of the year. Another factor is sector-specific issues, particularly the patent cliff, which has been mentioned. We have incorporated downward revisions to the figures for both this year and next year.

Now there is a better story. The employment situation is a great deal better than we thought at SPU time. We are expecting employment growth of 1.6%, which is an upward revision. We have reduced the unemployment projection from 14% at SPU time to about 13.5% now. We expect a percentage point reduction in next year's unemployment figure as well, so there is a good news story.

Members may ask, if GDP is recovering and employment rising, whether that implies negative productivity growth. We have had that once in 50 years. It is an unusual story and it is very difficult to rationalise. We think it is due to the composition of growth. There are productivity puzzles emerging in a number of countries, such as the UK, which also faces this issue. It is an interesting feature of the situation. It is something that cannot continue over the medium term, but we can probably see negative productivity on a once-off basis. We think it is due to the composition of growth - in other words, the pharma-chem issue is decreasing overall GDP, but this is not really having a labour market impact because the labour share of this sector is quite small relative to its profit share. I will hand over to Mr. Enright to speak on the next chart.