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

I thank the Deputy for her questions. What we have attempted to do is to capture some of these scenarios in chapter 6 of the stability programme update. As she correctly stated, it is incredibly difficult to model how the war will develop and what could be the policy decisions that are taken by the rest of the world in response. However, I believed that to publish an economic forecast for Ireland that did not acknowledge this uncertainty but tried to give figures in this regard would be an incomplete piece of work to offer to the Oireachtas and the European Commission. What we have done in chapter 6 is give our best judgment in this regard. We have tried to model what will be the effect in our economy if we see a movement in oil by a further 50% and a movement in the price of gas by a further 75% across 2022 and 2023. In terms of the impact that would have on the economy overall, from a fiscal point of view, our analysis is that, at a bare minimum, it would wipe out in its entirety the moderate surplus we have projected for next year. From an inflation point of view, we expect to see an increase for the year in which the further shock may happen of approximately two further points of inflation growth. We expect the impact that would have on the growth performance of the economy would be a further one to two points in terms of the medium-term growth performance of the economy.

The forecast is for there to be two points in inflation, the surplus to go in its entirety and an impact on our growth of somewhere between one and two points but I emphasise to Deputy Farrell that there is a great deal of uncertainty around that.