The Irish government has published its Summer Economic Statement setting out its new fiscal forecasts.
The official forecast is now for the deficit to fall to 0.9% of GDP in 2016 and to 0.4% in 2017, before achieving a balanced budget in 2018.
Government debt is expected to fall from 93.8% of GDP at end-2015 to 88% at end-2016 and to 85% by 2018, falling below the euro-area average.
According to Davy Stockbrokers, "The revisions since October’s budget are relatively small. Expenditure is €0.5bn higher in 2016, mainly to fund the perennially overspending health service. However, expected tax revenues are €1bn higher."
They added, "April’s official forecast for tax revenues of €47.2bn was identical to October’s Budget, despite strong outperformance of corporate tax revenues in late 2015. So it is hardly surprising that the Department of Finance has now revised up its projections for tax revenues. Hence, the deficit projection has been narrowed by €500m to €2.0bn in 2016 (or from 1.1% to 0.9% of GDP)."
Source: www.businessworld.ie
