Willie O'Dea (Limerick City, Fianna Fail)
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Question 83: To ask the Minister for Finance, in view of the fact that the International Monetary Fund has revised downward its estimate for growth in this country over the next three years and the EU is expected to do likewise, if further expenditure cuts or tax increases will be necessary to meet the target of reducing the budget deficit to 3% of GDP by 2015; and if he will make a statement on the matter. [8279/11]

Michael Noonan (Limerick City, Fine Gael)
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I have noted that the IMF, in its most recent World Economic Outlook (WEO), has revised downwards its forecast for real GDP growth in Ireland to 0.5 per cent in 2011. I would point out, however, that there has been no change to the IMF's forecasts for 2012 and further out. It is normal that economic forecasts are reviewed from time to time as additional information becomes available. Indeed, there has been quite a significant economic data flow since the IMF published its previous set of forecasts in November. My own Department is currently in the process of updating its forecasts, which it will submit to the European Commission by end-April as part of the new EU Semester and as is the norm these forecasts will be published.

The Programme for Government indicated that it is appropriate to adhere to the aggregate budgetary adjustment for the combined period 2011-2012. In preparation for Budget 2013, we will review progress on deficit reduction, in terms of achieving the objective of reaching the 3 per cent of GDP deficit target by 2015. This is a sensible course of action given the current unusual degree of uncertainty surrounding the short and medium term economic growth outlook. The Government is firmly committed to meeting the 3 per cent of GDP deficit target and to implementing the necessary fiscal consolidation to ensure it is met. It is, however, too early to speculate on what measures might be needed in later years.