Press release
Minister Donohoe welcomes the Irish Fiscal Advisory Council’s endorsement of Budget 2020 forecasts
Published on
Last updated on
Published on
Last updated on
The Department of Finance has today published its macroeconomic forecasts, covering the period 2019-2024. This is the first time that a national or international forecasting institution has published a full range of economic projections (covering GDP and its components, price developments, labour market indicators, etc) for a no-deal Brexit scenario. These forecasts were endorsed by the Irish Fiscal Advisory Council on 30 September following a period of engagement between the Department and the Council.
Commenting on the endorsement, Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T,D, said:
“I welcome the Irish Fiscal Advisory Council endorsement of the macroeconomic projections for Budget 2020.”
“As set out by the Government, Budget 2020’s central scenario projections assume that, for budgetary planning purposes, the UK will exit the EU without a ratification of the Withdrawal Agreement at the end of October, i.e. a no-deal exit. Under this scenario my Department’s forecasts show that the GDP growth rate will fall to 0.7 per cent next year in a no-deal scenario.”
“While the economy will still grow, the impact of lower growth will be significant, particularly in certain parts of the labour market. New jobs will still be created but at a slower rate. My Department’s forecasts show 53,000 fewer jobs will be created over the next five years compared to a no Brexit.”
“Even without a no-deal Brexit the economic outlook has deteriorated in recent months. The international environment continues to worsen, particularly in the manufacturing sectors in some of our closest trading partners. A no-deal Brexit just adds to the heightened global economic uncertainty.”
“As the Government has outlined over recent weeks, the impact on the most-exposed sectors of the economy from a disorderly Brexit could be very severe. Careful management of the economy and of the public finances is needed now more than ever in order to chart our way forward through the uncertain times ahead. This is why we are planning the Budget on the basis of a no-deal Brexit; this is the safest approach”
Ends
Note to editors
The Irish Fiscal Advisory Council has a statutory obligation under the Fiscal Responsibility Act 2012 to endorse, as appropriate, the macroeconomic forecasts prepared by the Department of Finance on which Budget 2020 will be based.
The Department provided its Budget 2020 forecasts—which cover a five-year-ahead forecast horizon—to the Council on 23rd September 2019. The Council discussed these forecasts with the Department of Finance on 27 September 2019, ahead of the Council’s endorsement meeting.
The Council’s approach to endorsing the Department’s macroeconomic forecasts has three elements:
The Department’s Budget 2020 disorderly Brexit projections are based on results from joint research undertaken between the ESRI and the Department of Finance published in March 2019. Available at:
The Department’s presentation to the Fiscal Council (published today alongside the endorsement letter from the Fiscal Council) sets out the Department’s views on the economic outlook and risks, its methodological approach to formulating a set on no-deal projections, and the projections themselves covering the period 2109-2024. A summary of the projections for this year and next is provided below:
| Growth rate (unless otherwise stated) | 2018 | 2019 | 2020 |
| GDP | 8.2 | 5.5 | 0.7 |
| GNP | 6.5 | 4.3 | -0.1 |
| GDP (nominal) | 9.1 | 5.9 | 2.4 |
| Employment | 2.9 | 2.4 | 0.8 |
| Unemployment rate | 5.8 | 5.2 | 5.7 |