Exchequer expectations show wide variation
The bank believes the deficit will be broadly in line with the €546 million projected in the budget. In other words the government will have to borrow just that amount to fund its activities for the year.
However, Mr Power said the figure could be three times that at €1.5 billion, while earlier in the week Davy Stockbrokers warned that the Government’s tax revenues could be out by at least €1bn, putting it in the same camp as Mr Power.
Davys and Mr Power argue the housing shortfall will have a bigger impact in the second half of this year when the slowdown starts to have a bigger impact.
That said, all sides agree the national finances are strong, with our debt ratio still one of the best in the EU by a big margin, giving us wriggle room if times get tough down the line.
What has emerged also from all three analyses is that none of them, despite their sharp markdown in the growth figures, expect the housing market to fall down around our ankles.
All suggest the correction will be painful, but the growth figures projected for this year and next still represent a good performance by the economy measured against the rest of Europe.
Of the three, the Central Bank is more bullish on growth for the two years, while cautioning that housing, if it collapsed, could derail the economy in a much more serious way than at present anticipated.
It says GNP will be 5% this year and 4% in 2008 against 4.5% and 3% for Davys, the most pessimistic of the three.
Mr Power is in between with GNP of 4.7% for this year and 3.5% for 2008.
All agree substantial job losses are on the cards over the next 18 months with 35,000 from Davys at the upper end of the graph.
