A surge in spending as more than a million workers were forced on to welfare payments by the pandemic lockdown plunged the Government finances €7.5bn into the red in April.
The Exchequer deficit was €4.28bn more than that recorded in April of last year and the Department of Finance warned the budget position would deteriorate even faster in coming months as the shock from the lockdown and the cliff-edge in consumer spending rippled through the economy.
"In particular, April is a non-VAT due month which means the scale of the shock to VAT receipts will likely only be apparent in May's returns," the department said.
On the spending side of the equation, the surge in unemployment claims and additional health spending helped push expenditure in the year to April up by €3.82bn from the same period last year at €20bn, largely driven by a rise of 23.5pc in current spending.
"The rise in expenditure primarily reflects increased departmental drawdown in response to the Covid-19 pandemic, particularly in relation to the Department of Health and the Department of Employment Affairs and Social Protection," the Department of Finance said.
With the economy set to contract by more than 10pc this year, slashing Government revenues at the same time as it has to pay out more in benefits, the budget deficit is expected to hit €23bn by the end of 2020.
The State went into lockdown on March 24 and that has now been extended to May 18, with the Government estimating the cost of the wage support and unemployment measures alone at €4bn-€4.5bn over a 12-week period.
Additional spending on health is put at €2bn.
Tax revenues fell €223m in the month of April to €2.5bn but the impact of strong growth before the lockdown took effect meant they shrank by just €86m to €15.49bn in the first four months of this year.
Before the pandemic hit, the Government had been on track to record a third successive annual budget surplus since the financial crisis, but the harsh blow from the business closures and mass job losses means that State revenues will fall dramatically.
Total taxation revenue is projected to decline by 16.4pc this year to €49.6bn, which would push it back below 2017 levels.
Amid the otherwise gloomy data, corporation tax receipts were up €435m on a cumulative basis, primarily due to payments from large companies.
"It is still too early in the year for an effect of the Covid-19 pandemic on corporation tax receipts to be identified," the department said.
Eight euro out of every €10 in corporation taxes is paid by large, usually American, multinationals and companies like Facebook and Apple.
Despite the positive news on company taxes, Grant Thornton partner Peter Vale warned against assuming they would rescue State finances.
"One thing for certain is that corporation tax receipts will not provide a buffer against weaker receipts elsewhere, as has been the case in the past," he said.
In order to bridge the shortfall, the State will borrow up to €24bn this year. As long as interest rates on that debt are lower than growth in the economy, the debt ratio will shrink over time, making the burden sustainable.