Ireland’s public finances remain largely on course after the first quarter of the year, with lower than expected spending offsetting slightly disappointing revenues. Goodbody Stockbrokers say this leaves Ireland on course to return its public finances to balance for the first time in more than a decade this year.
 
First quarter Exchequer Returns published yesterday by the Department of Finance show revenues were up 4.2% year on year (yoy), but were €188m (-1%) below expectations. Of the main tax headings, income tax was 2% lower than expectations in Q1, but was still up 6% yoy, indicating ongoing labour market strength. VAT receipts were in line with expectations (+2% yoy).
 
Total expenditure grew by 6% yoy in Q1. Within this, voted current spending increased by 4% yoy, while capital spending increased by 8%. The largest annual increase in current spending was seen in the health sector (+7% yoy), but this was in line with government expectations. 
 
According to Goodbody Stockbrokers, "In Budget 2018, the government set out its expectation for a modest deficit of 0.2% of GDP this year. With the annual Stability Programme Update soon to be published, we would not anticipate much change in this expectation."
 
Source: www.businessworld.ie