Monday 24 October 2016

Budget deficit of 4.1pc misses Government forecast - CSO

Published 20/04/2015 | 12:29

Department of Finance, Merrion Street, Dublin.
Department of Finance, Merrion Street, Dublin.

The Budget deficit last year was 4.1pc of the value of the economy, missing the Government’s forecast in the Budget, according to official data from the Central Statistics Office.

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In October, the Department of Finance had estimated the deficit would narrow to 3.7pc of gross domestic product (GDP) in 2014.

However, the deficit figure still remains significantly within the 5.1pc target the Government needed to make under European rules.

Earlier this year the Department of Finance warned that the Budget deficit would be slightly worse for 2014 than forecast last October - in part because of extra spending in health and justice.

Department officials said a higher-than-expected  deficit was expected due in part to the fact that extra spending was approved to deal with over-runs in health, and extra pay was also approved for gardai and prison officers

The CSO said the deficit was €7.63bn last year, an improvement on the 2013 position of €10.15bn.

Government revenue increased by over 6pc from €60.94bn in 2013 to €64.7bn in 2014, while expenditure increased by 1.7pc  from €71.1bn  to €72.3bn over the same period.

Government debt stood at 109.7pc of GDP last year, or €203.3bn.

Goodbody stockbrokers said today that the budget deficit will fall to below 2pc this year as tax revenues come in more than €2bn ahead of target for the year.

It said the deficit will fall back to 1.9pc of GDP this year - well ahead of the 2.7pc expected by the Government and well within the below 3pc target laid down by Europe.

In its latest economic assessment, Goodbody said the Government could have an easier budget, with attention focused on lower income tax to incentivise work, capital spending and targeted tax breaks for housing and entrepreneurs.

Goodbody expects the economy to grow by 4.3pc this year and 4pc next year.

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