Michael McGrath (Cork South Central, Fianna Fail)
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Question 112: To ask the Minister for Finance in view of the downward growth forecasts for the economy here, if the required fiscal adjustment for 2012 remains at €3.6 billion in accordance with the EU-International Monetary Fund programme or if it has been adjusted to reflect the less optimistic growth predictions. [9752/11]

Michael Noonan (Limerick City, Fine Gael)
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The Stability Programme Update submitted to the European Commission and published on my Department's website on Friday last, 29th April forecasts the 2012 General Government deficit at 8.6% of GDP. This forecast is based on the implementation of a budgetary adjustment of €3.6 billion in 2012. This is consistent with the Joint EU/IMF Programme of Financial Support for Ireland and is in accordance with this Government's commitment to adhere to the aggregate budgetary adjustment for the combined period 2011/2012, as set out in that Programme.

This updated forecast of the 2012 General Government deficit is somewhat higher than the Budget 2011 forecast for 2012, reflecting the cost of additional borrowing associated with the banking recapitalisations announced in March, the weaker economic outlook and its impact on potential tax revenue generation.

However, the forecast 2012 General Government deficit is within the terms of the revised EDP Recommendation issued by the ECOFIN Council in December 2010.

The 2012 General Government deficit forecast will of course be subject to further revision later this year as more up-to-date economic and fiscal data become available. Taking into account all information – both positive and negative – I will then bring forward my Budget for 2012 in December as is the norm. At this point, I see no reason to change the aggregate amount of consolidation needed.