Brian Lenihan Jnr (Dublin West, Fianna Fail)

First, I assure the Deputy that my attention is, of course, drawn to all of the important economic and fiscal data as they become available. The quarterly national accounts figures published by the Central Statistics Office last week show that GDP declined by 1.2% between the first and second quarters of this year. This figure must be seen in context, however, as it follows an increase of 2.2% in the first quarter. In other words, taken together, the figures for the first two quarters suggest that GDP has stabilised. The quarterly figure for GNP was a decline of 0.3% between the first and second quarters, pointing towards stabilisation in this measure of economic activity. In annual terms, GDP fell by 1.8% in the second quarter.

Personal consumption and investment moved in line with expectations while exports continued to perform well. However, a somewhat unexpected surge in imports reduced the overall level of GDP in the second quarter. The improvement in our export performance evident in the quarterly figures is encouraging, as is the fact that the export base has broadened in recent quarters. This suggests the significant improvements in competitiveness in recent years are having the desired effect.

The more recent economic indicators paint a somewhat mixed picture. On the domestic front retail sales have weakened over the summer months. On the external front the indications are that exports continue to perform well, which is to be welcomed. The most recent Exchequer returns show that in the first eight months of the year, €18.9 billion in tax revenue was collected. While this was almost €1.9 billion below what was collected in the same period in 2009, it was in line with what my Department had expected. In fact, tax revenues to the end of August were just 0.7% below target.

In terms of the labour market, employment fell sharply over the course of last year and this is reflected in the annual decline in the second quarter of this year. Shorter-term indicators point towards stabilisation. For instance, the seasonally adjusted quarter-on-quarter decline in employment in the second quarter was 0.4%. While we all regret any loss in employment, it is important to note this was the lowest rate of employment loss in more than two years. The unemployment rate picked up over the summer. However, much of this was due to seasonal factors, and this was confirmed yesterday with the publication of the September live register figures showing a very substantial reduction in the live register as well as a seasonally adjusted reduction.

In terms of the short-term evolution of the economy, there is much uncertainty at the moment. Recovery over the next year or so will probably be gradual. As I have indicated, my Department is currently assessing all relevant information and will publish revised macro-economic forecasts in the coming weeks.

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