Bernard Durkan (Kildare North, Fine Gael)
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106. To ask the Minister for Finance the extent to which the economic indicators remain positive, with particular reference to the need to maintain long-term sustainable economic growth; and if he will make a statement on the matter. [1804/16]

Bernard Durkan (Kildare North, Fine Gael)
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108. To ask the Minister for Finance the extent to which he is satisfied regarding the economic outlook for the next five years; and if he will make a statement on the matter. [1806/16]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 106 and 108 together.

In general, recent economic  indicators have been positive, indicating that the recovery is strengthening in a more sustainable manner.

The latest data show that GDP increased by 7.0 per cent year-on-year in the third quarter of 2015. This comes on the back of an increase of 6.8 per cent in the second quarter and 7.3 per cent in the first quarter. As a result, GDP per capita is now above its pre-crisis peak. In Budget 2016, published in October 2015, my Department forecast that the economy would grow by 6.2 per cent in 2015 and 4.3 per cent in 2016.

Importantly, the recovery is now being felt in the domestic economy with consumption up almost 3.5 per cent in the first three quarters of 2015 and investment up over 25 per cent. In fact, based on latest available information in 2015 domestic demand made its strongest positive contribution to economic growth since the crisis began. This is very important as the domestic sectors are both jobs-rich and tax-rich. The external sector is also showing continuing signs of growth with exports increasing by over 13 per cent in the first nine months of 2015.

The economic recovery is also clearly evident in the labour market where we have now had thirteen successive quarters of solid annual employment growth. As a result, the unemployment rate has fallen by over 6 percentage points since its peak in early 2012.

Over the medium term, my Department expects that the economy can grow by around 3 per cent per annum on a sustainable basis. However, achieving a sustained economic recovery cannot be taken for granted and is contingent upon a number of factors including sustainable public finances, maintaining our competitiveness position and ensuring inflationary pressures remain in check over the medium term.

Substantial progress has been made in terms of improving Ireland's competitiveness in recent years. The European Commission in its autumn forecasts estimated that relative unit labour costs in Ireland declined by 0.8 per cent annually in 2015. This is one of the largest declines across all EU Member States. Competitiveness gains have been achieved through productivity improvements. In fact, according to Commission forecasts, Ireland experienced the fastest productivity growth in the EU in 2015. It is vitally important that this competitiveness is preserved and continues to support growth.