Professor John McHale:

It is a very interesting question. The Deputy is absolutely right when he says that the official measures of the output gap currently show that the economy is overheating. There is actually a positive output gap. The projections are that we will come back to balance. These projections are based on the harmonised methodology that has been agreed between Governments and the European Commission. We think the commonly agreed methodology is giving misleading signals at the moment. We believe a degree of slack probably still exists in the economy. That can be seen in the unemployment rate, which has come down quite significantly but is still quite high at close to 9%. Given the strength of growth in the economy at the moment, we see that outward gap closing. We think it is a negative outward gap, which is contrary to the official measure, but it is closing. For that reason, we do not think an expansionary fiscal policy is warranted from a counter-cyclical perspective at this time. The Deputy asked a further question.