Bernard Durkan (Kildare North, Fine Gael)
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66. To ask the Minister for Public Expenditure and Reform if he will outline, based on the achievement of the various economic targets set in respect of public expenditure and reform for the current year, the degree to which he expects to be in a position to encourage economic growth in the context of his preparation for Budget 2025, with a view to positively impacting on the domestic economy; and if he will make a statement on the matter. [29514/24]

Bernard Durkan (Kildare North, Fine Gael)
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243. To ask the Minister for Public Expenditure and Reform the extent to which he expects positive developments in the economy to be reflected throughout the public and private sectors in the next twelve months; and if he will make a statement on the matter. [29957/24]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 66 and 243 together.

The budgetary approach taken in recent years has ensured that this Government could build on and improve day to day public services and key infrastructure requirements whilst also responding to economic shocks such as the global pandemic and the spike in inflation in order to minimise the fall-out for households and businesses. This response successfully balanced the need to continue to invest in expenditure priorities against the risk of adding to inflationary pressures in a fiscally sustainable manner.

As shown in the Stability Programme Update (SPU) 2024, medium term forecasts for our economy are broadly positive. HICP Inflation is easing at a quicker pace than expected, with the SPU forecast at 5.2 per cent in 2023, and 2.1 per cent for both 2024 and 2025, and then to 2.0 per cent for 2026 and 2027. Inflation is expected to continue to ease and should support economic activity with a relatively robust pace of economic growth in the near term, driven by an expected increase in real income this year and next year.

One of the best barometers of the health in the economy is the labour market. The strong recovery in our economy has delivered record levels of employment with a projected almost 2.8 million in employment next year compared to just over 2.3 million pre-pandemic. Employment is forecast to grow by 1.9 per cent in 2024, by 1.5 per cent in 2025 and 2026 and 1.1 per cent in 2027.

Multi-year public service collective public service pay agreements have also contributed to stability within our economy by facilitating ongoing reforms and the maintenance of industrial peace in the public service.

This strong economic performance is supported by the increased level of investment in measures to continuously improve public services, living standards and infrastructure made by this Government. Investment in infrastructure is a critical component in supporting Ireland’s growth and in delivering better, fit-for-purpose public services. The Government is committed to continuing the delivery of the vital infrastructure we need to support our future economic and social requirements, as well as our climate change commitments with record investment through the National Development Plan.

End-June 2024 spending shows that capital expenditure remains on an upward trajectory, increasing by €1.6 billion or over 50 per cent compared to the same time-frame last year. This is increased investment in our schools, housing, and transport infrastructure. We are also investing in our people, with the continued expansion of supports and services in Health, Housing, Education and Childcare sectors in Budget 2024.

Budget 2025 is being framed in the context of a continued need to improve public services and infrastructure that will support a growing population and growth in our economy. Plans for Budget 2025 are underway with considerations of the performance of the domestic economy at the forefront of our planning.