Government to meet debt targets this year – Central Bank
THE Government is on course to meet its debt targets this year, the Central Bank of Ireland has claimed.
Officials have forecast improved economic growth in 2012 - predicting GDP will grow by 0.7pc up from its previous projection of 0.5pc.
The Government hopes to reduce its deficit to 8.6pc of GDP this year, as part of its overall commitment to making budgetary adjustments of €12.4bn from now to 2015.
"The resulting improved starting position for this year, combined with upward revision to the nominal value of GDP for last year, and the trends for 2012 to date, should facilitate the achievement of this year's projected deficit of 8.6pc of GDP," said the Central Bank.
The bank, in its latest quarterly bulletin, said GDP growth in 2011 was 1.4pc.
While growth of GDP - the value of goods and services produced in Ireland - slowed this year, Central Bank officials expect it to pick up again in 2013 due to what they described as a stable outlook for domestic demand and recovery in external demand.
As well as reaching its target of reducing the Exchequer's deficit, the Government is also ahead of target in some of its spending, figures showed.
"Fiscal developments have remained broadly on track so far, despite weaker than expected growth," said the bank.
"There are signs that expenditure in certain areas is running ahead of target but it is assumed that adjustments will be made to bring the level of spending in line with budgetary projections."
Meanwhile, the Central Bank said developments at the last EU summit in June - at which Taoiseach Enda Kenny negotiated a separation of Ireland's bank debt from its sovereign debt - is likely to have limited impact on economic recovery.
Officials said the external environment continues to be "very challenging".
Strains in financial markets in Europe has impacted consumer and investor confidence, they explained, which has limited the prospect of recovery in Europe and Ireland.
"So, while the outcome of the most recent EU summit was favourable in that it recognised the need to address the burden of Ireland's banking-related debt, the wider environment has not improved to the extent that would have been hoped for," said the bank.