Bernard Durkan (Kildare North, Fine Gael)
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63. To ask the Minister for Finance the extent to which he expects the economic and fiscal position to improve or fluctuate over the next 12 months; and if he will make a statement on the matter. [42346/14]

Bernard Durkan (Kildare North, Fine Gael)
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65. To ask the Minister for Finance the extent to which the fundamental economic and fiscal indicators are now in positive mode; and if he will make a statement on the matter. [42348/14]

Bernard Durkan (Kildare North, Fine Gael)
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72. To ask the Minister for Finance the extent to which the economy here remains competitive; and if he will make a statement on the matter. [42373/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 63, 65 and 72 together.

Following successful implementation of the EU-IMF programme, the Irish economy has emerged from the crisis and there are clears signs that the economic recovery is gathering momentum. 

First estimates of economic activity for the second quarter of this year were very strong and were well ahead of consensus expectations with GDP growing by 1.5 per cent over the quarter and by 7.7 per cent year-on-year. Taken in conjunction with first quarter data, GDP grew by 5.8 per cent in the first half of this year. The increase in economic activity is broadly-based with both domestic sectors and exporting sectors performing strongly.

Exports rose by 13 per cent in the year to the second quarter of this year.  This was the fastest rate of expansion since 2001 and there is growing evidence that the impact of the patent expiry issue in the pharmaceutical sector appears to have passed.

On the domestic front, personal consumption was up by 1.8 per cent year-on-year in the second quarter and investment increased by 18.5 per cent.  Consumer spending has been strong in the first eight months of the year.  Retail sales in the period January to September were up 6 per cent when compared with the same period in 2013.  Core sales (excluding motor trades) were up 3 per cent over the same period.  Investment is also growing with both building and construction and machinery and equipment spending on a rising path. 

Recovery is perhaps most clearly evident in the labour market with employment increasing in each of the last seven quarters representing an increase of over 70,000 jobs since the low-point in mid-2012.  In line with this, the standardised unemployment rate stood at 11.1 per cent in September, having fallen from a peak of 15.1 per cent in early 2012.  

In terms of outlook, my Department is forecasting GDP growth of 4.7 per cent this year and 3.9 per cent in 2015. This is driven by a positive contribution from net exports on the back of economic growth in Ireland's trading partners.  Domestic demand is set to contribute to growth as well, with growing employment and rising household incomes resulting in an increase in private consumption.  Over the medium term, GDP growth of about 3½ per cent a year is anticipated.

Notwithstanding the current improvement, risks to the outlook remain for Ireland.  These relate to the low inflation observed in many advanced economics, geo-political tensions as well as the underperformance of the euro area economy.

In terms of the public finances, policy measures implemented by the Government have resulted in a decline in the deficit in recent years.  This decline has been in a phased manner, consistent with the dual needs of supporting domestic activity as well as repairing the public finances.  All of Ireland's interim deficit ceilings under the Excessive Deficit Procedure have been met and Ireland is firmly on track to achieve a deficit of below 3 per cent in 2015.  This has been important in restoring Ireland's credibility in the international markets - bond yields have fallen substantially since the high rates of mid-2011.  The debt ratio has peaked and is now on a downward path.  After 2015, fiscal policy will be set in line with the requirement to move towards Ireland's medium-term budgetary objective, which is for a balanced budget in structural terms.

Ireland's competitiveness has significantly improved in recent years.  Relatively low consumer price inflation over the last five years has meant that Irish price levels have fallen considerably relative to the euro area.  The Government remains focused on the need to continue to improve our competitiveness, including through up skilling of the workforce.