Noonan predicts higher growth and 'neutral' budget next month

The Government is now predicting the economy will grow by 4.5% this year, well ahead of the most recent estimates just last week of growth of 3%.

Noonan predicts higher growth and 'neutral' budget next month

The Government is now predicting the economy will grow by 4.5% this year, well ahead of the most recent estimates just last week of growth of 3%.

The Central Statistics Office published figures this morning for the second quarter, showing GDP up 7.7% since the same time last year, and GNP up 9% year on year.

Last week Michael Noonan said the growth figure for this year might increase to 3%. He now believes it will be even higher - around 4.5%.

The Finance Minister confirmed the figures mean we can have a neutral budget next month, but despite the exceptional figures, he has warned against any widespread giveaways, saying he will proceed with caution.

"We'll budget prudently to secure the growth, to sustain the growth, to make people safe in their jobs, to encourage more people to go to work, and to get all those young graduates who are abroad - we need to get them back."

He says the figures show we will now have a budget deficit for this year of around 3.5%, well ahead of the 4.8% target agreed with the Troika, and he described it as a "very short journey" to get it below 3% as planned next year.

On tax measures in the budget Michael Noonan also hinted at a package around income tax, the universal social charge and PRSI - saying that other measures would result in an uneven distribution of anything you give back.

The Tánaiste, Joan Burton, said recent figures show the worst is over. "We have left the worst difficulties and collapse of the economy behind," she said, "and it's not a credit-fuelled bubble, which is what happened in the 2000s."

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