Mr. John McCarthy:

Looking at the research one can see the probability of an upward revision is pretty much the same as the probability of a downward revision. Let me give an example. The Deputy is right about what happened in the past couple of years. The figure for 2011 has been revised to 2.2%; we indicated at the time that it would be 1.3% or 1.4%, but it came in stronger than we would have thought at one stage. Last year the initial estimate was 0.9%, but it was brought down to 0.2%. That makes our job difficult, but the CSO has a difficult job to do and the quarterly figures are extremely volatile in an Irish context. If the cut-off point for the supply of data by firms is the 15th day of the month and data from a large multinational come in on the 16th day of the month, they cannot be incorporated. It is a very difficult job.

With regard to not achieving the macro forecasts, we are not unique, as the Deputy acknowledges. The International Federation of Accountants has conducted some research and we have been too negative in our outlook for exports, as they have tended to over-perform relative to our forecasts, but this has been more than compensated for by our being too optimistic on the domestic demand. In other words, we assumed domestic demand would recover more rapidly than it has. It is a balance sheet recession problem and there is the question of the turning point which is very difficult to predict. I mentioned that there were tentative signs of a modest recovery in domestic demand. If that occurs, people will feel it on the ground and there will be more tax-rich and employment growth. Trying to predict this is very difficult and we have got it wrong, as others have.