Irish Economy

Irish Economy

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.

The figure was broadly in line with expectations in recent months, in part because of extra spending in Health and Justice.

The deficit data comes a week before Finance Minister Michael Noonan and Public Expenditure and Reform Minister Brendan Howlin are due to unveil the so-called spring statement in the Dáil, which will include revised economic forecasts that are thought to reflect the better than expected tax revenues.

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 meet under European rules.

Earlier this year the Department of Finance said the Budget deficit would be slightly worse for 2014 than forecast last October because of overruns in Health and extra pay approved for gardaí and prison officers.

In addition, money was set aside to deal with storm repairs caused by extreme weather early last year and a pension package for the workers of Waterford Wedgwood.

Both ministers Noonan and Howlin will make separate statements back-to-back in the Dáil next Tuesday from 2pm, similar to the routine on Budget day. However, neither minister will outline specific tax or spending measures.

Instead, it is expected they will focus broadly on policy direction, while outlining the constraints within which they must still operate.

"Anybody that is expecting to get budgetary measures announced will be disappointed," a spokesman for the Department of Finance said.

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

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

Government debt stood at 109.7pc of GDP last year, or €203.3bn. A spokesman for the Department said the deficit figure was in line with what was expected. Goodbody stockbrokers predicted the budget deficit will fall to below 2pc this year as tax revenues come in more than €2bn ahead of target for the year.