6 August 1999
ECONOMIC REVIEW AND OUTLOOK 1999
The Minister for Finance, Mr Charlie McCreevy TD, today announced the publication of the annual Economic Review and Outlook, which contains his Department's revised forecasts for the economy for 1999. The forecasts cover the main economic indicators and point to continuing strong growth in the economy.
The Minister welcomed the benefits of the continued economic growth, particularly the expected increase of 60,000 in the numbers employed in 1999. He emphasised that serious challenges, which are discussed in the Commentary in Part I of the Review, must be overcome in the years ahead if this strong growth is to be sustained. In particular, the Minister referred to inflationary pressures which, if allowed to persist, could have potentially serious consequences for Ireland's competitiveness.
The Minister said that the Government proposed to significantly increase public capital spending to meet the infrastructural deficits and to ensure that the country can realise its full growth potential. He stressed the need for the continuation of the restraint and co-operation of the social partnership agreements which were the cornerstone of current economic success. He said that, in the current very favourable conditions, budgetary policy must avoid adding unduly to domestic demand and exacerbating inflationary pressures.
The Minister also drew attention to the need for greater public awareness about the long-term budgetary challenges arising from the prospective ageing of the population in the decades ahead and the need for pre-funding the future Exchequer liabilities associated with population ageing.
The revised forecasts for 1999 can be summarised as follows.
- GDP and GNP to grow in volume terms by 7.5 and 6.6 per cent respectively;
Employment to grow by 60,000, while unemployment falls to 6 per cent;
- Inflation to average around 1.8 per cent in 1999;
- General Government Balance to remain in surplus, at about 3 per cent of GDP, compared with a Budget target surplus of 1.7 per cent of GDP and
- General Government Debt to fall to about 53 per cent of GDP.