Mr. Sebastian Barnes:

Growth will clearly play a very big part both, hopefully, over this year, next year - in particular - and the following year to bring the deficit down. That is partly because of some of the additional Covid measures. That should, hopefully, no longer be required and will drop out. Growth should bring the tax base up significantly and as a significant part of both narrowing the budget deficit and increasing the GNI*, the ratio can be lowered that way but probably not quite enough. As our analysis shows, even if one allows all of that to play out one is still likely to end up with a deficit at the end and some adjustment is likely to be needed to bring the debt ratio on a sufficiently downward path.

At the same there is a question about what will happen to the sustainable rate of growth in the medium term. We expect that it is likely to be lower than Ireland has experienced in the past. At the same time there will be more demands on public services, for example, as a result of ageing. It will be much harder to keep the budget balance at the same rate and, particularly, to increase spending at the same time without either having other adjustments in spending to offset it or without increasing taxes.