Michael McGrath (Cork South Central, Fianna Fail)
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Question 16: To ask the Minister for Finance his estimate of economic growth here for each of the years 2011, 2012, 2013, 2014 and 2015 [5421/11]

Michael Noonan (Limerick City, Fine Gael)
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Based on the domestic and international economic and financial data that was available last October, the Department of Finance prepared macroeconomic and fiscal forecasts which subsequently formed the basis of the budget forecasts published in early December. These forecasts, which at the time identified risks, positive and negative, remain the latest official forecasts.

These estimates are set out in the following table. A forecast for 2015 was not published at that time and is currently being developed.

As part of the new European semester, Ireland, along with all the other EU member states, is required to submit a revised stability programme update, SPU, to the EU Commission in April. The SPU will contain updated macroeconomic forecasts which will take on board the latest available data, domestic and international, and will also set out the Department's latest risk assessments.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister for confirming the Government's position that the official figures remain at 1.75% GDP for 2011 and a projected average growth of 2.75% for the period to 2014. The Government has committed in its programme for Government to a €6 billion correction this year, as provided for in the recently enacted Finance Bill 2011, and to a €3.6 billion correction for 2012. However, it has not gone further or provided details of how it proposes to correct the deficit in the subsequent years. For example, the EU-IMF deal contains a commitment to a €3.1 billion correction in 2013, on which point the programme for Government remains silent. I acknowledge the Government has indicated it will look at this by way of a review towards the end of 2012.

What is the Minister's current estimate of the deficit reduction that must be achieved between now and 2015 to achieve the 3% deficit? The Minister will be aware that in the programme for national recovery it was estimated that achieving 3% by 2014 would require a €15 billion correction, €6 billion of which is being achieved this year, with the remaining €9 billion to be achieved in subsequent years. What is the Minister's current estimate based on the level of deficit reduction that must be achieved by 2015 to achieve the 3% deficit?

Michael Noonan (Limerick City, Fine Gael)
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The figures I read out were provided by the Department of Finance in advance of preparation of the budget introduced by the former Minister for Finance, Deputy Brian Lenihan. These figures will obviously vary. I am giving the current set of figures available in the Department, without saying whether I believe them to be correct. I am aware that the IMF and EU Commission figures, both of which are at 0.9% for 2011, differ from ours. Reuters run a consensus growth figure across ten economies. The consensus growth figure from Reuters last week was 1.2%. The latest figure from Davy's, published yesterday, is 1.6%. There are variations on growth figures. I am not suggesting the Department of Finance figures will not change, are absolute or were not correct. Depending on the assumptions used and the perspective various growth figures emerge. When one builds these into the model one gets various results.

As regards the Deputy's other question, we have stated in the programme for Government that the level of correction in 2011 and 2012 will be adhered to by the Government in the quantum envisaged and that after 2012 we will undertake a review of the position and will make the necessary adjustments in the budgets for 2013, 2014 and 2015 to bring the deficit below 3% of GDP by 2015. It is not possible to say at this stage what the quantum will be because of the variables, one of the principle being what will be the actual growth rate and the cost of the bailout as time goes by.

Michael McGrath (Cork South Central, Fianna Fail)
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I would like to probe the Minister's view of economic growth versus the Department's forecasts. What is the Government view? Is it consistent with the figures last published by the Department of Finance? Surely, there must be a clear Government view in that regard. What level of growth is the Government expecting in 2011 and subsequent years?

Michael Noonan (Limerick City, Fine Gael)
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I do not want any misunderstanding in regard to what I am saying, namely, that the figures I have given are those provided to my predecessor in advance of preparation of the budget. The 2011 budget is built on an estimated economic growth of 1.7%. I am pointing out there are variations between respected agencies in relation to the growth figure. I am also saying that I fully accept that the figures I have given are those which are acceptable across Departments, in particular the Department of Finance, as we speak. However, as the year goes on these figures will be revised. I am not resiling from the figures but am simply pointing out that the Government has not changed its position on some whim and continues to work on the Department of Finance figures. That is the only way we can work.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As of today, the Government stands over the budget.