Written answers

Tuesday, 13 November 2012

Photo of Terence FlanaganTerence Flanagan (Dublin North East, Fine Gael)
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To ask the Minister for Finance if Budget 2013 will require more cuts and taxes as growth rates have been reduced by his Department for next year; and if he will make a statement on the matter. [49586/12]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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My Department published its most recent 2013 growth forecast in late April, and projected real GDP growth of 2.2% for the year as a whole. Since those forecasts were published, the global economy has worsened and international forecasting agencies have revised down their growth forecasts for 2013 in most of Ireland’s trading partners. This is likely to lead to lower-than-previously expected demand for Irish exports, and my Department is likely to revise down its real GDP forecast for 2013. Nonetheless, the outturn for nominal GDP throughout 2012 has been better than expected in April and, broadly speaking, nominal developments drive revenue performance. The achievement of fiscal targets is driven by a range of factors, including overall economic performance as well as specific developments which effect revenue and expenditure patterns in a given year.

Despite likely lower growth this year than originally estimated at budget time, we are on track to meet fiscal targets. A similar situation arose in 2011. Real GDP growth in 2011 was a little lower than originally forecast in December 2010, but we still managed to meet all our fiscal targets without the need for additional consolidation measures during the course of 2011. My Department will publish revised economic and fiscal forecasts in the coming days.

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