Carlow Fine Gael TD, Pat Deering, has welcomed today’s second Fiscal Assessment Report from the Fiscal Advisory Council.In particular, I welcome the Council’s view that the Department of Finance’s macro-economic forecasts set out in Budget 2012 were broadly appropriate at that time.
As the Council rightly point out, there have been a number of developments both domestically and internationally since the Budget was published, which could affect the economic outturn in 2012. The Department of Finance will take these into account, along with the latest available data, when updating its economic forecasts for the Stability Programme Update. This will be published later this month. In this regard today’s report is a timely addition. I note the councils warning that a further €400 million of fiscal measures may be necessary to meet the deficit target of 8.6% of GDP in 2012.
The exchequer returns for Q1 will be released at 4.30 this afternoon and the Returns will give the most up to date information on the Fiscal position and adherence to Budget targets in 2012. It is of course extremely important that we adhere to the deficit targets which have been set out in the Budget and that we restore sustainability to the public finances as soon as possible. In this context, we have entered 2012 with our tax base growing and our expenditure consolidation on track. In fact the 2011 exchequer deficit was €300m better that forecast at Budget time and this point is acknowledged by the Council.
The Department of Finance will of course continue to monitor emerging economic and fiscal developments throughout the year. However, the exchequer figures for first two months of the year have highlighted the robust nature of the budgetary arithmetic and we are track to meet the 8.6% target in 2012. Today’s Quarter 1 release will give the clearest indication of fiscal position in 2012.
