Michael Noonan (Limerick City, Fine Gael)

The terms of the EU-IMF programme require Ireland to achieve a general Government deficit of no more than 8.6% of GDP in 2012. Based on the macroeconomic and fiscal assessment set out in the medium-term fiscal statement, a €3.8 billion adjustment is therefore required in 2012 to meet this deficit target. My Department set out its latest forecasts in the medium-term fiscal statement. GDP growth of 1.6% is projected for next year. The Reuters consensus forecast for the end of October was 1.5% for 2012, broadly in line with my Department's views.

Given the current uncertainties in the global economic and financial environment, chapter 5 of the medium-term fiscal statement is dedicated to analysing the risks to the economic and budgetary outlook. This chapter also provides estimates of the impact on both the general Government balance and general Government debt of lower and also higher rates of economic growth. Clearly, if growth is weaker than currently anticipated, this will make the achievement of the 2012 deficit target more difficult, all else being equal. Generally speaking, taking account of the inherent uncertainty in macroeconomic and fiscal forecasting, the Department's current working assessment is that the risks to the outlook are broadly balanced.

That said, I am not going to speculate here, in mid-November, about an eventuality that may or may not arise. The Government's focus now is on delivering a budget for 2012 which will implement a set of measures in as fair and equitable a manner as possible that will allow for the achievement of next year's deficit target. The Government is committed to ensuring that the deficit target of 8.6% of GDP is achieved.

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