THE DEPARTMENT OF FINANCE has today published its Irish Stability Programme Update (SPU) for April.

The SPU sets out the official macro-economic and fiscal forecasts for Ireland until 2016 and today’s update was the first since last December’s Budget.

Minister for Finance Michael Noonan submitted the SPU to the Joint Oireachtas Committee on Finance, Public Expenditure and Reform this evening, ahead of its submission to the European Commission before the end-of-April deadline.

Speaking today, Noonan said that his department believed that growth would continue “into 2013 with GDP forecast to grow by 1.3 per cent this year, with a return to growth in employment and a fall in unemployment.”

While there has been a modest revision in the headline GDP forecast that was published on Budget day revision incorporates compositional changes to growth. [see image below].

On the plus side domestic demand has been revised up slightly on the back of recent high-frequency data leading to a slightly more positive revision to employment growth in 2013. However, this is offset by a downward revision in the export growth as the global economy remains weak and the impact of the patent cliff is weighing on pharma exports.

Noonan said that it was “clear from today’s figures that we are making progress in restoring order to the public finances and returning the economy to growth”, but added that the real challenged “remains getting people back to work across the country”

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Reaction

Fianna Fáil’s finance spokesperson Michael McGrath said that that SPU “again confirmed” government’s lack of ambition on the jobs front, while Sinn Féin’s Pearse Doherty said that the latest update was further proof that austerity was not working, saying:

The government has had to drastically reduce the number of jobs it predicted it would create by 2015 from 69,000 to 52,000. It has also had to reduce its growth forecast to 2015 from 8.2 per cent to 6.5 per cent. The predicted unemployment rate for 2015 has been increased from 11.7 per cent to 12.8 per cent. All of this is because the current policy of austerity is failing and the government needs to come to terms with that fact.

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