Stability Programme Update

A DoF presentation with some of the key forecasts in the SPU is available here. There is also a press release.

The full text is here.

16 replies on “Stability Programme Update”

Finance have revised up their projections for real GDP growth over the next few years(modestly) but have revised down the forecast level of nominal GDP, by around €2bn per annum over the next few years. Consequently the debt/GDP ratio is still forecast to fall from last year’s 123.7% but now at a slower pace.
There has been some marginal revisions to estimates of Ireland’s output gap but the net result is that the fiscal deficit is still largely seen as structural and not cyclical, meaning stronger growth per se does not remove the necessity for policy action on expenditure and/or taxation.
It is also interesting how the consensus has shifted over the past year in relation to the composition of growth, with domestic demand now seen as the main driver in 2014- indeed, Finance now expect net exports to act as a negative influence on GDP this year.

The usual upward trend the further out the growth projection. I wonder what the reasoning behind a medium term 3.5% growth rate is. Are they expecting interest rates to normalise at some stage? All of these projections whether public or private sector should come with sensitivities and explanations why they have been chosen. Mean reversion isn’t good enough.

Not sure either that international recovery is strengthening. Asset values are up but corporate earnings growth is watery.

text from Blind Biddy:

‘@Dan Mclaughlin; Dan, will gladly give you a wee tutotial on Ukaraine if you drop in to see me in Kharkov. You appear to be a wee bit one-sided and somewhat historically and factually challenged. Not to worry, you are certainly not alone.

I hear that Big Military has joined with Big Ag and Big Energy to support the “fu*k the EU” Puppet Mistress from the state dept in the plan for the Annexation of Ukraine for the benefit of the Systems of Money & Corporate Power. Big Military is EUphoric at the mo … I’m sure quite a few are certain of making more than a few billions if not trillions out of the misery of the Ukrainian/Russian Speaking Lifeworld …

@Dan McLaughlin

Methinks I owe you an apology. The post above from Blink Biddy should have gone to Daniel McLaughlin, who has been writing on Ukraine recently – but IMHO not really gettin the geo-political.

It is the policy of all associated with The Blind Biddy Hedge School & Fund to acknowledge all errors of fact; we do not recognize ‘errors of judjement’ very often for well known banana related reasons as they appear to have spread to the financial sector and its legal system bodyguards.

@Daniel Mclaughlin

See also above; pardon my silly error.

Below are the forecasts for 2013 – 18.

If you read the equivalent 2011 forecasts for comparison and look at 4 or 5 years out the only notable difference is they now assume (I know that’s not what they call it) that GDP moves to 3.5% rather than 3.0%.

Obviously the short end of the forecast curve has not been something appropriate for polite conversation.

More useful than the back of the IE envelope?



Nominal GDP

Here is a Russian link on dissemination of information.

If the translate link does not work the original is in the link at 3:16 am

Greek deficit -23 bn. Greek primary balance -16bn. Imply interest 7 bn on debt 318bn.
Ireland has interest of 7.5 on debt of approx 200 bn.

Perhaps there are other factors between primary and deficit, but overall Greece seems to be ‘borrowing’ cheaper’ than Ireland!.


Anybody who has ever done macro forecasting for a “living” knows how that you spend all of your time looking at Y1 and trying to guess where C+I+G + (X-M) is going by extrapolating recent trends and talking to your mates in other forecasting bodies. Then you look at all the other forecasts and go + or minus depending on how you feel.
By the time you get to year 5 it is population growth+ productivity plus inflation or 1+2 =real plus 2 for inflation.
By the time you get to year 5 you hope to have been promoted/moved on.

by that yardstick the 5 year forecasts of nominal GDP growth of less than 5% are credible. Who knows if the 1 year forecast is real or not.
For my own part I thing GDP growth will exceed 3 pct this year, Kilkenny will win the Hurling, Dubs the football and Australia will win the Derby

Then you write up your commentary, do a few power point slides, a radio interview of two and sit back for the next 3 months.


That’s probably the most outrageous claim I have ever read on the interweb.

Next you’ll be telling us historic data is frequently revised by significant amounts so we can’t even accurately quantify what went on last year, or something…

Think about public reverence for econoguruosity!.

True for you. The gurus can get in a lather over numbers, jump to conclusions, persuade panic striken clients to do trades on the basis of the analysis.
But 6 months later, you find that the economic event never happened. Pity you can’t unwind your trade though.

Eh, how did you manage to perceive a slight against FG, or indeed anything other than pompous forecasting, in any of that?


I think we are at cross purposes. I don’t perceive a slight against FG in anything you said.
My point is that too much time is devoted to the forecasts of economic gurus. It you threw random numbers into a spready you would have a better chance of being correct. They would give Druids a bad name. Based on past experience, trading on the back of these numbers is hazardous to your career.
That was the extent of my observation, nothing more.

Comments are closed.