Wednesday, 10 July 2019
Department of Finance
Summer Economic Statement
126. To ask the Minister for Finance the estimated impact of the €0.5 billion committed to the Rainy Day Fund in 2020 in the SES being used for expenditure would have on the expenditure benchmark and structural deficit; and if he will make a statement on the matter. [30290/19]
Annex 1 of the June 2019 Summer Economic Statement (SES) shows the impact on expenditure benchmark compliance of, ceteris paribas, using the €0.5 billion committed to the Rainy Day Fund for additional expenditure; a deviation of €0.3 billion in 2020. In terms of the structural balance, using the Department of Finance’s GDP-based alternative methodology for calculating the output gap, the structural deficit would move from a projected 0.1 per cent of GDP in 2020 to 0.3 per cent.
Both of these estimates are based on an orderly Brexit scenario. However, a disorderly exit cannot be ruled out, with a severe impact on the public finances. For this reason, the SES contains both orderly and disorderly Brexit budgetary scenarios. The Government will decide in September – based on information available at the time - which scenario will form the basis for Budget 2020.