Statement by Tánaiste and Minister for Finance, Simon Harris TD

“I am very conscious of the fact that people are really feeling financial pressure, and indeed financial anxiety, as a result of the ongoing conflict in the Gulf and wider Middle East region.

“The Government will take measures on Tuesday to reduce prices at the petrol pump, to support those most at risk of fuel poverty, and to help key sectors of the Irish economy that we depend on for our supply chains, including the haulage sector.

“I do, however, want to make some broader points.

“The hit to oil supplies is of the order 20 million barrels per day - making it the largest ever shock to the global oil market.

“At this point, there is no clarity regarding the depth and duration of the conflict - this means there is considerable uncertainty regarding the economic fallout from the shock to oil supplies.

“If the conflict continues for a prolonged period, the impact on the global economy will be real - Ireland could not be immune from such an outcome.

“It is important to stress that we, in Ireland, are approaching this global economic challenge from a position of relative strength - we are running a significant budgetary surplus which gives us the fiscal capacity to respond.

“In the past, we have often been criticised for running these budget surpluses and asked why we do not spend all available resources. The current situation highlights why it is so important to run budget surpluses in 'good times' - this common-sense approach to budgetary policy allows us to build up fiscal buffers and gives us the capacity to intervene when an economic shock arises.

“One important side-effect from the energy price shock has been the increase in sovereign borrowing costs, with these reaching near two-decade highs in some countries; our favourable fiscal position thankfully means that we are not in this space.

“The interventions we will announce on Tuesday strike an appropriate balance between providing help now and keeping some of our powder dry - nobody knows what the situation will be in a month from now; so we must remain nimble and flexible in our response.

“For this reason, I believe that any measures introduced initially should be for a short, defined period, with the option to renew, revise or adjust them as circumstances evolve; this approach is in line with that which some other EU Member States are taking.

“I have asked my officials to finalise a macroeconomic analysis covering a range of potential scenarios arising from this conflict. I expect to be in a position shortly to bring this analysis to Government, to the Oireachtas, and to the people of Ireland.

“As of now, I expect the Irish economy to continue to grow this year, albeit at a slower pace than previously envisaged.

“I will attend a meeting of the Eurogroup in the coming week, where we will have a further opportunity to assess the situation collectively; working with European counterparts is important at this time.

“This current conflict is a sharp reminder to the world, including Ireland, that we must accelerate our transition towards energy independence, and I will be discussing this with government colleagues in the days ahead.

“Finally, I want to stress that Ireland, and the Irish economy, will get through this - I have no doubt about that.

“That said, the sooner we see a de-escalation of the conflict the better for both humanity and for the living standards of everyone.”

ENDS