Tommy Broughan (Dublin North East, Labour)
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Question 83: To ask the Minister for Finance if he will estimate the current level of the Irish structural deficit; how this has changed in 2008, 2009, 2010 and 2011; his targets to eliminate the deficit; and if he will make a statement on the matter. [21713/11]

Michael Noonan (Limerick City, Fine Gael)
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The latest estimates of the structural deficit, as a percentage of GDP, are presented in the following table. These figures were compiled on the basis of economic and budgetary forecasts published in the latest Stability Programme Update and submitted to the EU Commission at the end of April.

Table 1: Structural Budget Balance, % of GDP

Source: Department of Finance, Ireland - Stability Programme Update, April 2011

Estimates of the structural deficit are determined on the basis of the harmonised methodology, developed jointly by the EU Commission and the Member States, to decompose the headline deficit into its cyclical and structural components. This structural deficit, by definition, excludes all one-off measures, which in an Irish context are primarily composed of fiscal supports to the banking sector. In practice, all estimates of the structural position are subject to considerable uncertainty, the sources of which have been outlined in an annex in the latest Stability Programme Update.

Notwithstanding these considerable uncertainties, the figures in Table 1 indicate that a significant part of the deficit is structural in nature, and so will not be eliminated with economic recovery. The structural deficit is projected to decrease substantially over the next five years in line with ongoing fiscal consolidation. Although not fully eliminated, the budget deficit will be at a much more sustainable level at the end of this period. It is worth noting that the structural primary balance, which excludes interest expenditure from the calculations, is projected to return to positive territory in 2014.