Fianna Fáil Spokesperson on Finance Michael McGrath has cautioned against deep cuts in the upcoming budget following today’s Central Bank forecast.
Reacting to the latest Central Bank report, Deputy McGrath expressed concern about the risk of a further slump in consumer confidence.
“The Government must tread a fine line between supporting the domestic economy, and the risk of missing the deficit target and being shut out of the bond markets,” said Deputy McGrath.
“We know from the first quarter GDP figures that consumer spending is already very weak. Taking too much out of the economy at this point risks a self-defeating further slump in consumer confidence. There is a strong argument for moderating the 2014 adjustment and spreading the remaining tax and expenditure measures move evenly over the next years.
“The downgrade to the 2013 growth forecast is based largely on the continuing Eurozone recession and it should prompt the Government to demand decisive policy actions at European level. The US in now much further ahead than Europe in recovering from the global financial crisis, yet we continue to get little more than platitudes from the European authorities about growth friendly policies.”