Oireachtas Joint and Select Committees

Tuesday, 27 April 2021

Committee on Budgetary Oversight

Draft Stability Programme Update: Engagement with Minister for Finance

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

This is covered off in the stability programme update that I know the committee has considered. We get into the issue of trying to look at different scenarios that our economy could face in that update. In particular, we look at what different scenarios relating to the spread of the disease could mean for our economic forecasts. The scenario analysis we have done here is more advanced than we have had to do in recent years. We cover off the different risk assessments and risk matrices in tables Nos. 17 and 18 in the stability programme update. My view is that limitations in our modelling are not preventing these scenarios being more detailed. It is, rather, limitations in our ability to forecast and the uncertainty of future developments. If our scenarios are in any way insufficient for the committee, it is not due to the challenges that we have with modelling and the models available to the Department of Finance, but it is a reflection of the fact that so many things could happen in the future. We have to make reasonable assumptions regarding the most likely things and, on the basis of that, make our forecasts. For those who believe our forecasts should be more accurate and sophisticated, as some do, I ask for their help as to how we can form a better view of what the future may hold. We have seen how unpredictable it is over the past year.

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