Ireland's Deficit Approaches Fifteen Billion Euro

An Exchequer deficit of €14,709 million was recorded in the six months to end-June 2009 compared to a deficit of €5,648 million in the same period last year according to the Exchequer Returns submitted at the end of June.

Total current receipts in the six months to end June 2009 amounted to €16,310 million compared to €19,525 million in the same period last year, while tax revenue was €188 million or 1.2% below expectations for the period and was down by 17.3% year-on-year. Total net voted expenditure was €530 million or 2.3% less than planned for and 0.9% above expenditure levels for the same period last year.

The increase of just over €9 billion in the deficit was said to be due primarily to a payment of €3 billion as part of the bank recapitalisation program, a payment of €3 billion to Anglo Irish Bank which occurred in June, and the year-on-year decrease in taxes of the order of €3.3 billion.

Total net voted spending was €22,911 million to the end of June compared to €22,702 million in the same period in 2008. This was €530 million or 2.3% below profile and was 0.9% above expenditure levels for the same period last year.

Commenting on the Returns, the Minister for Finance, Mr Brian Lenihan, TD said: "The end-June Exchequer Returns released today are close to my Department's estimates for this point of the year. The rate of decline in overall tax revenue has eased.

"The decision in the October Budget to change payment dates for Corporation Tax has had an impact on these figures. Reflecting the weaker economic conditions, Income Tax and VAT are a little behind expectations at this stage of the year.

"There are still substantial targets in the months ahead so tax revenues will need to be carefully monitored as the year progresses. Nonetheless, overall tax revenues are close to our mid-year target.

"In terms of expenditure, net voted spending on an overall basis is lower than we had anticipated for the mid-year position. The annual expenditure targets that the Government set out in the 2009 Revised Estimates Volume remain valid.

"The figures show that the difficult but necessary decisions taken in the recent April Supplementary Budget are taking effect. Stabilising the public finances is a critical part of the renewal of our economy. We must pursue this course of action resolutely to allow all in society to benefit from the upturn in the global economy when it occurs."