Kevin Humphreys (Dublin South East, Labour)
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69. To ask the Minister for Finance the Central Statistics Office revision to Irish GDP growth figures for 2013 and the nominal increase in total GDP for 2013 and the half yearly Exchequer return the projected outturn on the deficit to GDP for 2014; the figures required to meet a deficit target of 3% of GDP in 2015; and if he will make a statement on the matter. [30218/14]

Michael Noonan (Limerick City, Fine Gael)
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Annual National Income and Expenditure results for 2013 published by the CSO on July 3rd, included substantial backward revisions to the level of nominal GDP. Of the €10.7 billion upward revision to the 2013 outturn, some €7.2bn is owing to the reclassification of R&D as investment as part of technical changes being implemented across all EU Member States under the transition to the new statistical standard (ESA 2010). A further €3.5 billion related to the combined impact of the inclusion of certain illicit activities, as well as other minor ESA 2010 changes and more routine revisions caused by the inclusion of more comprehensive and up-to-date data.

Fiscal targets are expressed as a proportion of nominal GDP and the upward revision to the level of GDP has a favourable impact on our deficit ratio. My Department estimated a deficit of 4.8 per cent of GDP for this year in the Stability Programme last April on the basis of GDP estimates available at the time. If everything else was to remain unchanged, the impact from the higher level of GDP would mean the deficit would be closer to 4.5 per cent of GDP.

It is important to note that published GDP revisions equate to a change in measurement of economic output and do not result in a material increase in the revenue raising capacity of the economy. Furthermore, the proportional benefit of these technical changes to the deficit ratio in future years is likely to be smaller, as the deficit level itself continues to contract.

Turning to the Exchequer returns for the first half of the 2014, there was a solid performance in terms of both tax and expenditure. In line with the improvement in the domestic economy, the reduction in the live register and the increase in employment levels, tax revenues are growing and expenditure on public services is within Budget. However, given the number of moving parts and only six months of revenue and expenditure data to hand, it is too early to speculate on what the adjustment package necessary to deliver on our EDP obligations will be.