Terence Flanagan (Dublin North East, Fine Gael)
Link to this: Individually | In context

Question 97: To ask the Minister for Finance if he has had cause to revise the projections for the public finances set out in the run-up to the general election; and if he will make a statement on the matter. [21901/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

The relevant projections for the public finances in the run-up to last year's election were the three year projections published in Budget 2007 on 6th December 2006. Based on GDP growth of 4.6% for 2008 and a projected stronger fiscal position in 2007 than materialised, an Exchequer deficit of €1,559 million was anticipated for 2008. Since then revised projections were published on 5th December 2007 in Budget 2008 and an Exchequer deficit of €4,866 million was projected for this year. At this time an economic growth rate of 3.0 per cent in GDP terms was forecast for 2008. A number of specific risks to that forecast were highlighted and these are now materialising. While my Department has not published new forecasts, I would point out that the current market consensus forecasts for growth now average around 2 per cent for this year. More modest growth has implications for the evolution of the public finances.

At end-April, my Department published information which showed that overall tax receipts for the first four months of the year were €736 million, or 5.3 per cent, behind target. At the time it was indicated that it was not expected that the tax shortfall would be recouped. Later today, as is the norm, my Department will publish detailed information in relation to the Exchequer position at end-May. In relation to tax revenue, these numbers will show a further deterioration in taxes and as previously indicated the shortfall is not expected to be recouped later in the year. My Department monitors tax receipts and expenditure on an ongoing basis and an updated view on the expected Exchequer position in 2008 will be presented at the end of this quarter.

While the fiscal position has weakened from that envisaged at Budget time, this has to be considered in the context of the strong position of the public finances such as our low debt to GDP ratio.