Bernard Durkan (Kildare North, Fine Gael)
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21. To ask the Minister for Finance the extent to which all economic indicators are positively aligned to maximum economic benefit for the State over the next five years; and if he will make a statement on the matter. [50833/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Recent economic indicators have generally been positive, indicating that the recovery is continuing in a sustainable manner.  

Real GDP grew by 5.8 per cent in the second quarter of this year on an annual basis. This follows annual growth of 5.2 per cent in the first quarter.

As part of Budget 2018, my Department is forecasting real GDP growth of 4.3 per cent for this year and 3.5 per cent for next year, with growth averaging close to 3 per cent in the following years.

The recovery is most clearly evident in the labour market. Employment increased at an annual rate of 2.4 per cent in the second quarter of 2017, representing the creation of over 48,000 additional jobs over the year. Since the low-point in 2012 there are now an additional 230,000 people in employment.

The continued growth in employment has seen the unemployment rate fall from over 15 per cent in 2012 to 6.0 per cent in October 2017 which is close to the level considered to represent full employment in Ireland.

The strong performance of the labour market is set to continue in the short term. As part of Budget 2018, my Department is projecting that an additional 48,000 jobs will be created next year. Strong employment growth is expected to further reduce the unemployment rate, to around 5 ½ per cent by the end of next year.

Other indicators including retail sales, purchasing managers’ indices and consumer sentiment all point to continued growth in the economy.

However, there are a number of risks at present including the UK’s decision to exit the EU and the possibility of significant tax reform in the US. In addition, the sharp appreciation of the euro-sterling rate is posing significant challenges, particularly for the traditional sector, tourism sector and areas sensitive to cross-border trade.

These sources of uncertainty highlight the importance of prudent management of the public finances and of competitiveness-oriented policies that would help the Irish economy to weather any global economic downturn that may emerge.

In summary, I am satisfied that the economic indicators remain stable although the level of uncertainty at present remains elevated. It is therefore critical that appropriate polices are implemented and that is what the Government will continue to do.