THE FINANCE MINISTER Michael Noonan has said that the government will publish a deficit reduction plan in October to outline spending cuts and tax increases to come over the next three or four years.
Speaking from the Fine Gael parliamentary party meeting in Galway, Noonan told RTÉ News he hoped that Ireland’s economy would be growing again by 2014.
Noonan said that he recognised that some people, particularly those aged in their 30s, were putting off buying a house because of economic uncertainty. He said that, by outlining a deficit reduction plan in October along with a more detailed Budget in December, the government hoped to offer some clarity regarding the shape of the state’s fiscal plans for the coming years.
Meanwhile, earlier today, new data showed that consumer sentiment remained virtually unchanged in August - indicating that another austere budget could mean ‘breaking point’ for the economy.
The KBC Bank/ESRI Consumer Sentiment Index stood at 55.8 for August, which was very close to the 55.9 value measured in July. Austin Hughes, of KBC, said that the while the index was well above its all-time low of 39.6 recorded in July 2008, the drop in buying intentions were a sign of how fragile Irish consumer sentiment currently was.
Hughes warned that frontloading budget adjustments may no longer be the most appropriate model for delivering a budget, as fragile sentiment meant that a fifth successive austere budget could push the economy to “breaking point”.
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