Bernard Durkan (Kildare North, Fine Gael)
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Question 58: To ask the Minister for Finance if, based on the most recent data available to him, he is satisfied that he can accurately predict the likely trend in the economy in view of the current or projected position in respect of the economic fundamentals; and if he will make a statement on the matter. [45295/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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At the current juncture, there is greater uncertainty than normal attached to any set of forecasts, given the scale of the shocks to which the global and domestic economies have been subjected to. In this context, the Stability Programme Update, published alongside the Budget, highlighted that the Budget day economic forecasts were more uncertain than normal, with risks to the outlook firmly on the downside.

The further deterioration in tax receipts in 2008, as seen by the end-November Exchequer Returns, the continuing weakening of consumer and investor confidence, adverse currency movements, continued difficulty in the international financial markets and depressed economic conditions, are all evidence of those risks materialising.

As I have already said today, all indications are that economic activity in 2009 will contract by significantly more than the forecast in Budget 2009 with an overall contraction of perhaps somewhere in the region of 3 to 4 per cent.

Upon receipt of the end-year fiscal data and the latest economic data, including the third quarter national income data, a revised economic and fiscal assessment will be prepared by my Department in early January and brought forward for Government consideration. This assessment will reflect the dramatically changed environment now being faced. We are living in a time of unprecedented economic difficulties, and the changed circumstances that have occurred in a short period of time must be addressed.

Finally, as I have said previously, short-term economic forecasting is not an exact science, given the many moving parts which make up an economy. This is well evidenced by the revisions that most international forecasters have had to make to their recently published forecasts.