Brian Cowen (Laois-Offaly, Fianna Fail)

The ESRI believes there will be negative growth of 0.4% this year. That would be the most negative forecast we have heard in recent times. The consensus is that we will have some growth. Obviously, we will be providing our half yearly figures from the Department of Finance next week and will make an assessment based on the most up-to-date data we have. By their nature, forecasts are essentially just that — forecasts.

Six months ago, I set out the possibility of 3% growth in the economy but I also set out various downsides and risks that will affect that forecast, all of which have now materialised. Twelve months ago, Deputy Kenny suggested the economy might grow by 4%. Forecasts are forecasts based on various assumptions. Since then, we have had a change in the global economic environment that affects Ireland in the same way as it affects everyone else. Allied to that has been a correction in the domestic housing market in addition to an increase in commodity and oil prices. All of this has an effect and drag on growth. The ESRI has made its prediction that there may be negative growth this year. There are other economists who are not quite as pessimistic. One thing we can be sure of is that now the downside risks have materialised, we will not have the sort of growth in the economy we were entitled to predict earlier in the year and last year. We, as Government, must address that situation. We must work within the budgetary parameters we have set out and set a course for a budgetary strategy that will be sustainable.

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