Kathleen Lynch (Cork North Central, Labour)
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Question 72: To ask the Minister for Finance if he will comment on the latest quarterly national accounts which showed a record 11.3% fall in GNP for 2009; if he will provide an estimate for GNP growth for first quarter and for the full year of 2010; and if he will make a statement on the matter. [17198/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Preliminary quarterly national accounts data show that the volume of GNP contracted by 11.3% last year. While this was the largest decline on record, and represents a very significant decline in our living standards, it was not unexpected. In the December 2009 budget, my Department had assumed a double-digit contraction for GNP last year of the order of 101⁄2% and a 71⁄2% decline in GDP. The preliminary data show that the decline in GDP last year was 7.1%.

The very sharp fall in national income last year was mainly due to a large decline in consumer spending and a contraction of nearly 50 per cent in the level of new house building. In addition, the volume of exports fell last year, although in aggregate terms our export performance was relatively good given the prevailing international climate.

My Department does not publish economic forecasts for individual quarters, as these can be volatile and subject to revision, hence the note of caution when analysing GDP on a quarterly basis. That said I would point out that, for the most part, the available data for the first quarter provide tentative evidence that conditions are beginning to stabilise. For this year as a whole, the budget day forecast is for GNP to contract by 1.7% and GDP to contract by 1.3% with positive annual growth anticipated during the second half of the year. This projection has not changed. Moreover, I note that most economic commentators now expect a resumption of positive growth from the second half of this year.