Concerns raised on economic forecasting in light of €5BN revenue bounce in November returns

02 December 2021

Labour Party Spokesperson on Finance and Public Expenditure & Reform Ged Nash has welcomed the November Exchequer returns that show Government revenue running €5.4bn over projected figures.

However, Deputy Nash said that there was an issue about forecasting being so far off the mark and that it mitigated against proper planning and resource use and planning in the public finances.

Deputy Nash said:

“This is not the first time the crystal ball gazers in the Department of Finance have gotten it so wrong.

“I will be raising the issue at the Dáil’s Budgetary Oversight Committee with a view to securing perspectives on the issue from both inside and external to the Department of Finance.

“It is obviously a welcome development to see the public finances running ahead of forecast to this extent.

“Nonetheless, the position is far from satisfactory. Forecast divergence of this magnitude makes it difficult to plan the provision of public services, particularly on a multi-annual basis. This is not a sustainable position and it needs to be explained.

“I don’t underestimate the challenges involved in forecasting against the backdrop of the pace of change in the public finances over the last decade, compounded recently by the massive disruption caused by the pandemic.

“I am conscious too that while forecasting is primarily the preserve of the Department of Finance, both the Departments of Public Expenditure and Reform and the Fiscal Advisory Council also have contributory roles.

“A constructive discussion of the issues, methodologies and challenges involved at the relevant Oireachtas Committee with contributions from both Ministers and their relevant officials would be useful at this stage.”

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