Irish economic growth is likely to fall short of the Government's 4.5 per cent prediction for this year, the Minister for Finance Brian Cowen admitted today.
Speaking at a Fianna Fáil parliamentary party meeting at Druids Glen, Co Wicklow, Mr Cown said that the rate in current public expenditure will have to slow below that of recent years.
Mr Cowen has already indicated that the increase in Government spending for 2008 will be half the 13 per cent planned for this year. Exchequer returns released by the Department of Finance in the eight months to September show that stamp duty receipts are running €268 million below expectations as the property market slows sharply.
The Government has Budgeted for a full-year deficit of €546 million for 2007.
Today Mr Cowen said pointedly that he intends to "slow the rate of increase in public spending growth" and that "double-digit spending increases are a thing of the past".
He added that despite this, spending growth will remain higher than in most developed countries.
Outlining his Budget priorities, Mr Cowen said spending for 2008 will follow the Fianna Fail election manifesto and the Programme for Government commitments.
The slowing in the Irish economy was described as an "impressively soft landing, for an economy that has gone through one of the most dramatic shifts in performance in the history of the developed world."
The minister said over 700,000 more people working in Ireland today than in 1997 bringing total employment in the State to over 2 million. "This is a phenomenal achievement for a country with a long history of unemployment and emigration," Mr Cowen said.
While the labour market has absorbed substantial numbers of immigrants "labour costs are rising and we will need to work hard to ensure that such costs are contained and that productivity is enhanced further," he said.
