The Irish Fiscal Advisory Council (IFAC) has said the Government’s ongoing spending overruns amount to “poor planning and budgeting”.
It follows the Summer Economic Statement (SES), published on Tuesday, showing that planned expenditure for this year is now expected to amount to €108.7 billion, €3.3 billion more than set out in Budget 2025.
Some €90.5 billion was allocated in the budget to current expenditure, or the cost of delivering public services, and €14.9 billion to capital expenditure. Both lines have since increased.
“Based on spending data for the first six months of the year, this upward revision is likely to be insufficient,” IFAC said in one of a series of posts it made on X on Wednesday afternoon on the Summer Economic Statement.
[ Tax and spending package of €9.4bn to form basis of Budget 2026Opens in new window ]
“Analysis by the Council suggests current spending is likely to be around current spending is likely to be around €1 billion higher than the SES figures.”
IFAC chairman Seamus Coffey confirmed the posts when contacted by The Irish Times.
While gross voted spending is now officially forecast to rise by €7.9 billion next year, IFAC said that spending overruns in 2026 are “almost inevitable”. Some €2 billion of the increase is being provided for capital expenditure under the Government’s revised National Development Plan.
The Government is allowing for scope for €1.5 billion of tax cuts in Budget 2026, which, IFAC notes, is the equivalent of linking the system to inflation.
[ What did the summer economic statement really tell us about Budget 2026?Opens in new window ]
“Excluding windfall corporation tax receipts, the Government is forecasting a budget deficit of almost €11 billion next year,” the watchdog said, nothing that this equates to 3.2 per cent of gross national income-star (GNI*), a measure of the domestic economy. “This is despite a strong economy.”
IFAC also took aim at how the Government warned that if there is a deterioration in the international tariffs landscape, the 2026 budget package would be smaller.
“This is exactly the opposite of standard economic advice. Countercyclical policy means giving more support when the economy is weak and less when it is strong,” it said.
The EU is currently in trade talks with the US in an effort to avert US president Donald Trump’s threatened 30 per cent charge on most European imports kicking in from August 1st. The EU has threatened to impose nearly €100 billion worth of retaliatory tariffs on US imports ranging from bourbon whiskey to Boeing aircraft in one fell swoop if an accord isn’t reached by the deadline.
“More generally, the Government’s budgetary plans are focused on the short term,” IFAC said, noting that the Government has yet to live up to its own programme commitment to publish a medium-term fiscal structural plan.
