The Minister for Finance, Paschal Donohoe TD, published the Government’s Stability Programme Update for 2021, last Wednesday, 14 April. This document sets out the Department of Finance macroeconomic and fiscal forecasts for the period 2021-2025.
GDP is forecast to expand by 4.5 percent this year and 5 percent next year. Economic recovery over the second half of this year and into next year rests on the success of the vaccination programme and the assumption of an easing of public health restrictions.
The labour market has been borne the brunt of the pandemic with the unemployment rate projected to average 16.25 percent this year and 8.25 percent next year. The level of employment is projected to increase by around 80,000 this year and 225,000 jobs next year, but will still remain below its pre-crisis peak until 2023.
After recording a General Government Deficit of 5.0 percent of GDP last year, a further deficit of 4.7 percent of GDP is in prospect for this year before falling to 2.8 percent of GDP next year. As a result, public debt has increased from €204 billion immediately pre-pandemic to an estimated €239 billion this year or 112 percent of GNI. As the economy recovers next year, the deficit will improve to 2.8 percent of GDP, with the debt ratio falling to 107 per cent of GNI.
For more information and to access the draft Stability Programme Update 2021 and summary document, see the Department of Finance press release.
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