Mr. John McCarthy:

If one goes back to taking into account the 26% growth, and with everything else being equal, that would actually increase the size of the structural deficit because one has an economy where we estimated a small positive output gap for 2016 at the time of the stability programme.

In 2015, we had 26% instead of 7.8% so there is an even larger positive output gap which means more of the deficit is structural. There are offsetting impacts in the sense that one of the reasons for the 26% figure was the massive influx of intellectual property, which is included in our capital stock and so is also on the supply side. It also means the estimate of the output gap goes up ever so slightly so that we are further away from the MTO. The reference rate is based on a ten-year average which is fixed in the spring so the figure does not take into account the 26% actual GDP growth.

The Deputy asked how much the economy was overheating and what it means for where we are in terms of the business cycle and the structural balance.