Government committed to €3.5bn adjustment: Noonan

Finance Minister Michael Noonan has said that the Government is committed to making a €3.5bn adjustment in next month’s budget.

However, he said things are turning towards “a more positive Ireland”.

Mr Noonan — speaking yesterday at the Leinster Society of Chartered Accountants lunch in Dublin — said progress is being made on returning Ireland to growth.

He said the Government sees no need to change its forecast for 0.7% gross domestic product growth for 2012, before stronger growth is seen next year.

“We have to get back to a sustainable and competitive economy that is moving on all fronts.

“We’re not there yet, but we’re making progress on that,” he said.

He said he expects the economy to expand by more next year than the 1.4% growth posted in 2011, but his forecast revises down the Government’s previous estimate for a 2.2% expansion.

The International Monetary Fund (IMF), last week cut its forecast for growth next year to 1.1% amid the worsening global outlook.

Taking ‘measures of success’ as the theme of his address, the minister said things like stabilising the property market, improving retail sales, and meeting troika targets were signs of an improving economy; but that more needs to be done.

He said the next measure of success will be for Ireland to exit its bailout programme and make a full-scale successful return to the markets at attractive yield rates.

Mr Noonan also said he was very encouraged by comments made by his German counterpart, Wolfgang Schauble — earlier this week — about being 100% certain Ireland will not need a second bailout.

However, Mr Noonan said Ireland’s full and long- term recovery and success could not just be measured on its exit from its bailout programme and a growing economy; but also hinges on lowering unemployment and easing the debt burden on the nation’s households.

Real success, he said, will be based on generating a modern economy, underpinned by trading with neighbouring states, with a good standard of living for the entire population, and a lower unemployment rate.

Mr Noonan said Ireland’s exit from the bailout programme would not usher an end to the current period of financial adjustment, but would mark a significant turning point in Ireland’s economic recovery.