Pat Rabbitte (Dublin South West, Labour)
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Question 38: To ask the Minister for Finance his views on the most recent quarterly national accounts of the Central Statistics Office which showed a decline of 8.5% of GDP, and a decline of 12% of GNP, in the first three months of 2009 compared to the same period in 2008; and if he will make a statement on the matter. [27985/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Central Statistics Office published quarterly national accounts data for the first quarter of 2009 last week. These show that GDP and GNP for this period declined by 81⁄2 and 12 per cent, respectively, compared with the corresponding period last year.

In terms of the detail of the first quarter figures, the sharp declines in housing output and in personal spending were the main reasons for the contraction in the first quarter. The one positive that we can take from the data is that the rate of export decline is not as large as in many other export-oriented economies and given the significant fall in imports means that there is a positive contribution from net trade.

In overall terms, the first quarter figures are clearly exceptionally weak but we must be very careful not to double-count: the figures relate to the first quarter and previously published data had indicated a very poor performance in this period. In other words, we already knew that conditions had deteriorated significantly in the first quarter on an annual basis.

Moreover, while my Department does not produce economic forecasts for each quarter, there are tentative indications that the rate of deterioration may have slowed in the second quarter. Retail sales, industrial production, consumer confidence and purchasing manager's indices data are all consistent with this. Indeed, most economic commentators are now of the view that the rate of decline may be slowing.

Based on the information available at the end of March, my Department published its macroeconomic forecasts in the Supplementary Budget. My Department forecasts that GDP would decline by 73⁄4 per cent and that GNP would fall by 8 per cent. The first quarter GDP data along with the available data for the second quarter suggests that the Department's forecast is still appropriate.

In relation to the very weak first quarter GNP data caution must be used when interpreting these figures as quarterly GNP is highly volatile. Nonetheless, this figure is considerably weaker than previously expected and will need to be carefully monitored.

Finally, I want to assure the Deputy that the Government is not complacent – activity is still clearly declining and unemployment rising. Reversing these developments requires further measures and the Government will not be found wanting in this regard.