Lenihan denies stall in recovery and anticipates growth in 2011
FINANCE minister Brian Lenihan yesterday denied the economic recovery was running out of steam, as he pointed to a a stabilising of the public finances.
He spoke after ministers yesterday agreed to stick to planned spending cuts and tax hikes worth €3bn in this year's budget.
Despite signals of apparent stabilisation of the public finances, Mr Lenihan told his colleagues they had to adhere to the targets set out.
Although no specific details for December 2011's Budget were discussed, the ministers agreed that there was no room for deviation from the €3bn figure.
At the first cabinet meeting after the summer break, Mr Lenihan also briefed his colleagues on the latest taxation and spending figures for the first eight months of the year.
The figures to the end of August, to be published today, are expected to continue the pattern of being in line with predictions. August is not a major month for tax takes, so no major alterations to expectations will be signalled.
Mr Lenihan said: "I think it's fairer to say we are seeing a stabilisation and we are also seeing signs of growth in the economic performance and exports in particular and that's good for the country," he said.
Today's figures are believed to show government spending is slightly behind schedule, due to the level of deflation in certain sections of the economy.
Many forecasters are saying growth in Ireland will be one of highest in the Eurozone next year, Mr Lenihan said.
He said it was important to look at the positives and surmount the negatives.
The first matter to be discussed at cabinet was yesterday's Live Register figures.
Mr Lenihan said it was now clear that unemployment would probably peak in the next few months and then reduce.
The first meeting of the Cabinet since the end of July lasted from 11am until 2pm. The forthcoming Budget was not discussed. Aside from the rate of unemployment and Anglo Irish Bank's future, a scheme to get 10,000 people doing community work in exchange for the dole was also discussed by ministers.
Enterprise, Trade and Innovation Minister Batt O'Keeffe admitted the unemployment figures were disappointing.
"There are far too many workers unemployed and demand remains weak -- but there are signs of an increase in recruitment activity," Mr O'Keeffe said.
"In fact there is evidence to suggest difficulties in filling vacancies in some areas of our economy such as ICT, science and engineering. It has been estimated that there will be a requirement to recruit up to 96,000 workers, on average, every year up to 2014."
Tourism minister Mary Hanafin said the Government's priorities were: "Getting banks to increase credit, particularly to those companies who need to ensure they can increase their exports."
Taoiseach Brian Cowen said the Government was working to support small businesses by improving competitiveness, ensuring a flow of credit, maintaining supportive tax measures and reducing the regulatory burden for business.