Bernard Durkan (Kildare North, Fine Gael)
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12. To ask the Minister for Finance the extent to which the economic indicators remain on course and in line with expectation for the foreseeable future; the extent to which specific factors have impacted or are likely to impact in a negative way; and if he will make a statement on the matter. [40415/17]

Bernard Durkan (Kildare North, Fine Gael)
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This question relates to the need for ongoing monitoring of the economy with particular reference to the economic indicators affected by recent developments such as US economic retrenchment, Brexit, and the Apple tax decision, all of which will have an impact on them one way or the other.

Paschal Donohoe (Dublin Central, Fine Gael)
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The strong performance of the economy is expected to continue over the short run. As part of budget 2018, my Department is forecasting real GDP growth of 4.3 % for this year and 3.5% for next year. The benefit of this growth will be felt in the labour market, with an additional 48,000 jobs projected to be created next year.

Recent economic indicators have generally been positive. Real GDP grew by 5.8% in the second quarter of this year on an annual basis. This follows annual growth of 5.2% in the first quarter. While headline GDP figures can be exaggerated in an Irish context, other indicators such as employment, unemployment trends and taxation receipts confirm the strong recovery. 

Employment growth remains strong with an annual rate of 2.4% recorded in the second quarter of 2017, representing the creation of more than 48,000 additional jobs over the year. The increase in employment remains broad-based, with gains recorded in 11 of the 14 sectors reported by the Central Statistics Office, CSO. The continued growth in employment has seen the unemployment rate fall from more than 15% in 2012 to 6.1% in September 2017.

However, a number of risks are present, including the UK’s decision to exit the EU and the possibility of significant tax reform in the US. In addition, the sharp appreciation of the euro rate against sterling is posing significant challenges, particularly for traditional sectors such as the tourism sector and areas sensitive to cross-Border trade. These sources of uncertainty highlight the importance of careful management of the public finances and of competitiveness-oriented policies that improve the resilience of the economy.

In summary, I am satisfied that the economic indicators remain stable and that our economic fundamentals are strong, although the level of uncertainty remains elevated. In this regard, it is critical that appropriate polices are implemented and that is what the Government will continue to do.

Bernard Durkan (Kildare North, Fine Gael)
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To what extent are contingency plans in place or will be put in place to address the issues that are likely to emerge and which arise from the issues to which the Minister has already referred and from the European Commission's attitude to the imposition of tax in this jurisdiction on profits earned in other jurisdictions? To what extent has it been possible to identify the specific impact in each case? What measures can be taken in that regard?

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy referred to the European Commission and its views on taxation. Our views are clear on the matter. I outlined them earlier on in response to Deputy Michael McGrath. I do not foresee any circumstances in which the ability of our State to set our corporation tax rate in the way we do so at the moment will be affected by the proposals from the European Commission.

More broadly, all of this debate emphasises the need to have an economy that has many sources of growth, as opposed to the single source of growth in the period leading up to the crash, which was construction, supported by our banking sector. It is a further reason to take all the steps we can to make our national finances as resilient as possible, where we reduce the need for our State to borrow and have our national debt on a path where it is beginning to fall.

Bernard Durkan (Kildare North, Fine Gael)
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Does the Minister have specific proposals in mind to rebut, react to and offset the possible negative impact of discouragement of foreign direct investors to invest in the Irish economy? To what extent does his Department continue to monitor the likely impact and what is likely to happen in the event of Brexit, US retrenchment and the Commission's proposals coinciding and impacting negatively on a country of our economic size?

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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We would be banjaxed then, Bernard.

Bernard Durkan (Kildare North, Fine Gael)
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That is exactly the point.

Paschal Donohoe (Dublin Central, Fine Gael)
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We are seeking to manage all those risks carefully. This is why we are increasing the amount of resources available to agencies which are involved in promoting Ireland to ensure that our message about the Irish economy and its attractiveness is well understood by all. Our recent record in job creation and investment into our country points to the ability of our agencies and the Government to communicate that proposition well abroad. We will continue to do so and make available all the resources needed to do it.