Brendan Howlin (Wexford, Labour) | Oireachtas source

On the amendment, the Deputy's suggestion relates to the possibility that the fiscal council could endorse a set of forecasts in advance of a budget and that last minute budgetary measures, involving contraction-stimulation of the economy or on the price side, would have to be taken into consideration in the final forecast. However, existing procedures under the agreed two pack will allow the reconciliation to be made without any difficulty.

Member states are already obliged under regulation 473 on budgetary plans to state the underlying assumptions, the methodology and economic models which drive the forecast underlying the budget. Specifically, each member state is obliged to show the main assumptions of the independent macro-economic forecasts and important economic developments which are relevant to the achieving of the stated budgetary targets.

An annex containing the methodology, the economic models and assumptions and other relevant parameters underpinning the budgetary forecasts and the estimated impact of aggregated budgetary measures on economic growth must also be provided in the documentation. This allows for comparisons to be made between the endorsed and final macro-economic forecasts given that the type of stimulation or contraction about which I spoke would have to be set out in the assumption of both forecasts. The annex on forecast methodology and models would set out how stimulus or contraction impacts on growth for the working of a fiscal multiplier. A departmental working paper on forecasting methodology is being prepared and will explain how this calculated.

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