Brendan Keenan: It's 1990 and Ireland's national debt is falling but still at 110pc of GNP
For the month of August, Brendan Keenan looks back on four decades of economic ups and downs and this week recalls the Nineties
IT'S amazing what a bit of growth can do for the public finances. A situation that seemed impossible just three years ago now looks more than manageable. But, as always, new problems rear their heads.
The government has maintained the firm control of public spending that had been so lacking for so long. Spending on public services this year will be bang on the Budget target of a 7pc increase. When inflation is added, that is a real increase of just 1pc.
Finance minister Albert Reynolds also had a windfall from falling interest rates. The legacy of past borrowing means debt service costs account for a fifth of all current spending and a third of tax revenues. But, instead of rising by 7.5pc as expected at Budget time, the interest bill fell by 4.5pc.