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Update to Ireland’s Stability Programme shows best way to plan for risk is to aim for growth

• Ireland’s GDP is forecast to grow by 4.9 per cent in 2016 and 3.9 per cent in 2017. This growth is yielding dividends in the labour market where 50,000 jobs are projected to be created this year, and the unemployment rate set to fall to around 8 per cent by the end of the year.
• Debt-to-GDP ratio to fall further to around 88 per cent of GDP, below the euro area average.
• The projections are prepared on a no-policy change basis given the ongoing negotiations regarding the formation of a Government.

The document sets out the Government’s macroeconomic and fiscal forecasts for the period 2016-2021. The Government is adopting a less stringent Medium Term Budgetary Objective – our target will be to achieve structural deficit of -0.5 per cent of GDP.

The Excessive Deficit Procedure, which was opened for Ireland in 2009, is set to be closed this year. The macroeconomic forecasts underpinning the SPU have been endorsed by the Irish Fiscal Advisory Council.

Speaking on the publication of the Stability Programme Update the Minister for Finance Michael Noonan T.D. stated:
“The recovery has gained momentum over the past year with growth of 7.8 per cent recorded in 2015. A clear indication of the enormous distance we have travelled can be gauged when you consider that the general government deficit was 12.6 per cent of GDP when we took office in 2011. For this year it is currently projected to be at 1.1 per cent of GDP and it is projected to fall further to 0.4 per cent of GDP next year.”
“While the short-term prospects are positive, it is also clear that there is considerable uncertainty at present. As a small and open economy we must be cognisant of each of these risks. The best way to prepare ourselves is to ensure an appropriate fiscal stance and adopt competitiveness-oriented policies.”
Minister's Opening Address to Dail on Draft SPU Debate