Cowen Unveils Pre-Budget Outlook

by Jason Gorringe, Tax-News.com, London

23 October 2006

Ireland's Department of Finance last week published its “Pre-Budget Outlook, October 2006” which sets out the outlook for the Irish economy over the period 2006 – 2008.

This updates and provides more information on the economic and fiscal projections presented in the Budget Booklet published on Budget day last December.

The report points out that the outlook for the Irish economy over the period 2006 – 2008 is broadly positive. Based on available data, which point to a continuation of strong economic growth this year, the Department has revised its 2006 growth forecasts upwards.

In overall terms, the Department projects that Gross Domestic Product (GDP) will grow by 5¼% and Gross National Product (GNP) will grow by 5¾% in 2006. For the period 2006 to 2008 the Department forecast that both GDP and GNP will expand by 5% per annum.

The projected budgetary position over the period 2006 to 2008, on a pre-Estimates and pre-Budget basis, is for an overall surplus of 1.0% of GDP in 2006 followed by projected surpluses of 0.4% and 0.2% in 2007 and 2008. These figures will change depending on the final Estimates of Expenditure and Budget day decisions.

Commenting on the Outlook, Minister for Finance, Brian Cowen, welcomed the publication as the first step in his reform of the Budget process, and also welcomed the broadly positive outlook for the Irish economy over the period 2006 to 2008.

He stated that:

“This document will provide a valuable context and framework within which the 2007 Budget decisions can be set. The publication of the Outlook marks a more open and transparent framework against which I will be presenting the Budget to the Dáil in December. It is a major step forward in my plans to modernise the budget process by providing improved and more relevant information to the public and their representatives."

"I also welcome the very positive outlook for growth in the published projections notwithstanding the real challenges that we face over the next few years.”

“My Department’s economic projections for growth over the forecast period are appropriate to an economy at full employment and achieving its potential rate of growth. There are risks on the international scene of lower growth and variable oil prices but the prudent fiscal policies that this Government has followed give us the flexibility to cope with such risks.”

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