Jan O'Sullivan (Limerick East, Labour)
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Question 119: To ask the Minister for Finance his views on the latest Central Bank quarterly economic bulletin which forecast a contraction of 10.6% of gross national product here in 2009, down from a 9.4% contraction forecast in July 2009; his further views on the return of a marked divergence in GNP performance [i]vis-À-vis[/i] gross domestic product; and if he will make a statement on the matter. [37683/09]

Mary Upton (Dublin South Central, Labour)
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Question 171: To ask the Minister for Finance his views on the Economic and Social Research Institute's latest forecast, in its most recent quarterly economic bulletin, that the gross national product here will fall by 15.8% over the 2008 to 2010 period; and if he will make a statement on the matter. [37698/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I propose to take Questions Nos. 119 and 171 together.

In October, both the Central Bank and the ESRI published updated forecasts for the Irish economy. A number of private sector institutions have also recently updated their projections.

The Central Bank is now projecting that GNP will fall by 10.6 per cent this year or that in GDP terms the economy will contract by 7.8 per cent. The downward revision from the Bank's summer forecast stems from the publication of output data for the first half of this year which show, in particular, very weak GNP figures.

The ESRI is projecting that GNP will fall by a cumulative 13.2 per cent over the 2008 – 2010 period or expressed in GDP terms by 11.3 per cent over this time.

My Department will review its forecasts in the Pre-Budget Outlook later this month.

It is worth noting that regular forecasters of the Irish economy now concur with the view that the decline in activity has slowed and that positive annual growth will be recorded at some stage next year.

In terms of the divergences in the GDP and GNP data published for the first half of this year, these data suggest that the difference between the two measures for the year as a whole will be somewhat larger than normal. Given the large multinational sector here, the level of GDP typically exceeds that of GNP due to profit outflows. However, the level of GNP this year has been further affected by weaker profit inflows and by higher debt service costs to non-residents. This latter factor is likely to persist given the trends in our national debt over the coming years.