Michael Noonan (Limerick City, Fine Gael)

The budget day forecasts were for GDP growth of 1.3% this year and GNP growth of 0.7%. These figures were in line with the prevailing consensus at the time. Moreover, it is worth stressing that the Irish Fiscal Advisory Council, in its second assessment report, outlines that the budget day macroeconomic forecasts were appropriate at the time. Since then, forecasts for growth in some of our major trading partners have been revised downwards, while available data suggest that domestic demand - mainly personal consumer spending and investment - may be slightly weaker than assumed.

Having said that, not all of the recent economic indicators have been negative. For instance, the latest data provide tentative indications that the labour market may be stabilising, while purchasing managers indices have been moving in the right direction over recent months. Consequently, there is a lot of uncertainty. Officials in my Department are assessing all the available information with a view to producing revised forecasts at the end of this month. These will be published in the stability programme update, which all member states in the EU are producing as part of the so-called European semester.

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