Mr. John McCarthy:

I thank the committee for the opportunity to present the short-term economic outlook in advance of budget 2016. I am accompanied by colleagues from the macroeconomic forecasting team, including Ms Laura Weymes, Mr. Ian Power and Mr. Brendan O'Connor.

By way of background, regulation 473/13 requires non-programme euro area member states to submit draft budgetary plans to the European Commission and the Eurogroup by 15 October of each year. The regulation further specifies that the macroeconomic forecasts upon which the budget is based must be either produced or endorsed by an independent body. Ireland, like the vast majority of euro area member states, has taken the endorsement route with the endorsement function assigned to the Irish Fiscal Advisory Council, IFAC.

The endorsement process for budget 2016 has been under way since mid-September, culminating in a presentation by my colleagues and I to IFAC last Thursday. For the annual budget, as distinct from the stability programme, IFAC has a role in assessing just the short-term projections, namely, those for the current year and the following year. I can report that last Friday, IFAC formally endorsed the Department's economic projections for 2015 and 2016.

The numbers are 6.2% real growth in 2015 and 4.2% in 2016. The letter of endorsement from the Chairman of the Irish Fiscal Advisory Council has been placed on the website of both institutions. We have provided the committee with a version of the presentation that was provided to IFAC. It is a large set of slides so we will present a more concise version to members today. We sent this to the clerk on Friday last. We will put this on the Department's website this evening.

The economic projections we are presenting are based on the technical assumption of a budget package amounting to €1.2 billion for next year, which is the latest stated policy position. It was set out in the stability programme update, SPU, that was published last April. It is a purely technical assumption and does not represent the Government's policy position. The economic forecasts that will be presented on budget day will take account of all budgetary measures. As the Minister has outlined in his letter to the Chairman of the committee, we are not in a position to discuss the fiscal situation or the implications for policy. I stress that we did not discuss any of these issues with IFAC, as our discussion was purely on the macroeconomic situation.

I propose we go through the presentation very briefly. Of the 50 odd slides, I propose we go through the first 30 as the later slides are somewhat more technical. We will put them online and we have supplied them to the committee. We will, of course, take questions on the later slides if the committee so wishes. Mr. Power will outline the latest international economic developments, Mr. O'Connor will then make a presentation on the domestic situation and Ms Weymes will discuss the labour market outcomes and I will then summarise the key trends and what they mean for the short-term economic outlook. It should last between 15 to 20 minutes and, subject to the agreement of the Chairman, we will then take questions.