Brian Cowen (Laois-Offaly, Fianna Fail)

On budget day, my Department projected a GDP growth rate of 3% for this year and a GNP growth rate of 2.8%. While lower than that experienced in recent years, this is still a robust rate of growth, given the prevailing international conditions. At budget time, my Department estimated that house completions in 2008 would be around 55,000 units.

I believe that, in aggregate terms, the budget day forecasts, which were presented to the House last month, are still appropriate. Of course, as was noted at budget time, there are risks, both internal and external, to these economic forecasts and my Department will, as always, continue to monitor the situation closely.

As regards the budgetary projections for tax and expenditure, it is still very early in the year and there is no reason to alter the budgetary forecasts at this time. Overall, current spending is budgeted to increase by approximately €4 billion or about 8%, capital spending by approximately €1 billion or around 12% and tax revenues by just over €1.6 billion or 3.5% in 2008. The general Government debt level is projected to be around 26% of GDP at the end of this year, one of the lowest levels in the euro area.

As with economic developments, my Department monitors tax receipts and expenditure on an ongoing basis and as more data becomes available during the year, any significant changes to the expected Exchequer position in 2008 will be signalled and presented at the end of each quarter.

It is important to remember that the fundamentals of the Irish economy remain strong and that the economy has responded quickly and effectively to changing economic conditions in the past. Short-term movements in financial markets have limited effects on wider economic trends. Of course, any deterioration in financial market conditions sustained over a prolonged period of time could spill over into economic developments.

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