Dept. of Finance official: Growth issues could mean harsher Budget

The Secretary-General of the Department of Finance has left open the possibility of a tougher then planned Budget because we will have to downgrade growth prospects for this year and next. 

The top civil servant says the government will follow the European Union in cutting Irish economic growth forecast for this year. 

John Moran has also indicated that lower growth could have an impact on the Budget.

The EU says growth this year will be just 0.4% whish is less than the 0.7% in government predictions. 

And growth for next year at just 1.1% is half what the coalition is currently predicting. 

‘Downward pressure on revenue’

The European Commission downgraded the Irish economic growth forecast for the current year to 0.4% of GDP.

The Irish government is still predicting growth of 0.7% for 2012 and the Secretary-General of the Department of Finance has admitted the government will have to downgrade its own prediction over the coming weeks.

It is planning to make €3.5 billion worth of cuts in the Budget next month.

But John Moran said lower than expected growth levels might mean a tougher budget.

He says new lower figures are going before the Economic Management Council today. 

And he admitted to Michael McGrath of Fianna Fáil at the Dáil Finance Committee that the lower figures could mean a tougher Budget in December.