The EU Commission has predicted that the Irish exchequer finances will remain in surplus over the next three years and that the ratio of debt to national output will continue to fall sharply. The Commission's autumn forecasts predict a slight easing in Irish GDP growth to 7.6 per cent between now and 1999 but a doubling of the rate of inflation to 3 per cent in the same period. The economy - as measured by GDP - is expected to grow by 8.6 per cent this year, and 8.1 per cent next year. Prices, as measured by the deflator of private consumption, are expected to rise by 1.4 per cent this year and 2.5 per cent next year.

The projections, based on a continuation of current policies, also show the Government's gross debt declining to 52.3 per cent of GDP by 1999, well below the target set by the Maastricht criteria of 60 per cent. On the Government's borrowing/lending position, now seen as the key Maastricht target, the Commission predicts an Irish surplus rising from 0.6 per cent of GDP to 2.1 per cent in 1999. Progress in dealing with unemployment is also expected to be significant: the percentage of the civilian labour force jobless is set to fall from 10.8 this year to 7.9 in 1999, down from 15.6 in 1993, a substantially faster rate of reduction than that in the rest of the EU.