Irish Budget Deficit EUR1.619 Billion At End Of 2007

by Carla Johnson, Investors Offshore.com, London

07 January 2008

Ireland's Finance Ministry on Thursday reported a EUR1.619 billion budget deficit for 2007, compared to a EUR2.265 billion budget surplus at the end of 2006.

The country's Current Account Balance recorded a surplus of EUR6,997 million in 2007 compared to a budgeted surplus of EUR8,050 million for 2007 as a whole, whilst the Capital Account Balance recorded a deficit of EUR8,616 million in 2007 compared to a budgeted deficit of EUR8,597 million for 2007 as a whole.

Commenting on the results, the Tánaiste and Minister for Finance, Brian Cowen, T.D. announced that:

“The 2007 Outturn for the Exchequer Balance is in line with that envisaged when framing my 2008 Budget, some weeks ago.”

Commenting on the tax revenues, the Tánaiste noted that:

“The year on year increase in tax revenue was 3.8%. This was below the original expectations for 2007, mainly due to developments in the property market."

"However, the growth in Income Tax receipts – up by about 9.5% over 2006 points to sound economic activity and tallies with expectations of income and employment growth in 2007.”

In relation to developments on the spending front, the Tánaiste said that:

“The outturn for current expenditure shows year on year growth of 12.3%, in line with expectations, and reflecting in particular the significantly improved allocations for Health, Social Welfare and Education."

" Strong growth in capital expenditure reflects the progress being made under the National Development Plan – this Government’s Framework for investment in our physical and social infrastructure.”

Finally, the Tánaiste reiterated that while additional borrowing had to be undertaken in 2007, the overall debt position was sound, observing that:

“The nation’s debt now represents about 25% of our income compared to approximately 65% ten years ago. This is one of the lowest in the euro area.”

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