Minister Donohoe publishes the Stability Programme Update 2018

17th April, 2018

The Minister for Finance and for Public Expenditure and Reform, Paschal Donohoe T.D., today (Tuesday) published the Government’s Stability Programme Update 2018 (SPU). The Stability Programme sets outs the Government’s updated macroeconomic and fiscal forecasts for the period 2018-2021. The macroeconomic forecasts underpinning the SPU were endorsed by the Irish Fiscal Advisory Council on 10th April.

Minister Donohoe will present the draft Stability Programme Update to the Oireachtas Budget Oversight Committee on Wednesday, 18th April 2018. The finalised document will be submitted to both the European Commission and the European Council on 30th April 2018, in line with legal deadline.

The SPU sets out:

  • Growth forecast for 2018 revised up to 5.6 per cent and up to 4.0 per cent for next year.
  • The labour market will continue to benefit from strong growth in domestic demand, with employment growth of 2.7 per cent forecast for this year.
  • On this basis, there will be more people at work in Ireland by the end of this year than ever before.
  • Unemployment is projected to average 5.8 per cent this year and 5.3 per cent next year.
  • A general government deficit of 0.2 per cent of GDP is projected for this year, unchanged from the Budget-day forecast.  For next year the deficit is projected at 0.1 per cent of GDP.
  • This takes account of additional spending amounting to €2.6 billion, of which almost €1.5 billion relates to capital spending increases set out in the National Development Plan. This includes €0.4 billion for Housing, Planning and Local Government, €0.3 billion for Transport, Tourism and Sport, €0.2 billion for Health, and €0.2 billion for Education. This investment will ensure a sustained increase in social housing delivery, new transport infrastructure and maintenance, along with the prioritisation of additional school infrastructure and the delivery of the National Children’s Hospital.  
  • Our debt position continues to improve, with our general government debt-to-GDP ratio falling to 68 per cent last year and set to decline to 66 per cent this year.  However, the ratio of debt-to-GNI* is projected at 97 per cent for this year.

Commenting on the Stability Programme Update, the Minister for Finance said: ‘The short-term outlook for our economy, as set out in the SPU, is positive and this is delivering gains where it really matters – in the labour market.  In the first half of this year, the level of employment will rise above its pre-crisis peak, a sure sign of the distance we have travelled. Our hard-won gains cannot be taken for granted though. Geopolitical factors that have the potential to negatively impact growth; disruption to world trade and the effect that could have on the global economy; policy uncertainty in the US and, of course, Brexit, all have the potential to damage future economic conditions.  It is imperative, therefore, that we continue to prudently manage the economy and the public finances in an increasingly uncertain world.  We will continue to do this through the implementation of sensible policies that will ensure that growth is maintained at sustainable levels and that our improved economic performance translates to a better quality standard of living for all of our people.”