Budget balance is now within touching distance for the first time in over a decade, according to a new report by Goodbody Stockbrokers.
Goodbody claim Ireland’s public finances will continue to show improvement on a headline basis in 2018, with the deficit expected to fall to just 0.3% of GDP, the lowest in more than a decade. Albeit modest, this would represent the ninth consecutive year of deficit reduction.
While Goodbody would argue that a budget surplus is preferable at this stage of the cycle, the turnaround in the public finances since the 2009-2012 period is remarkable. On the evidence of Budget 2018, Goodbody claims the new Minister looks to be a safe pair of hands.
According to Goodbody, "There were small progressive reductions in income tax that will underpin our consumer spending projections in 2018. The changes are not material however, amounting to <1% decrease in take-home pay for most workers, with a larger impact for the lower paid. Following the restraint of the crisis years, spending is forecast to grow by 4.1% in 2018 (2.9%)."
They added, "Capital spending will ramp up aggressively over the coming years (+17% in 2018). This is welcomed. It is disappointing, however, given limited resources, that some untargeted current spending measures were announced. There is a better way."