Oireachtas Joint and Select Committees

Wednesday, 13 July 2022

Joint Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach

Summer Economic Statement: Irish Fiscal Advisory Council

Mr. Sebastian Barnes:

We just make a very general assumption about inflation. We looked at this very briefly. In some of those other areas, inflation would be quite similar to the inflation that households face and will be fairly well approximated by general inflation. In other areas, there might be specific pressures. The existing levels of service numbers in there are very much based on the previous forecast for inflation. This extra amount will be allocated in the budget. Choices will have to be made about to what extent we stand still in different areas. One of the major uncertainties in all of this, and also on the tax side, is what will happen to wages. It is very hard to predict how wages will change over the next year. That will obviously affect the cost of providing Government services and will impact how we think about the public sector pay deals.

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