The surge in tax revenue in November has pushed the Exchequer into surplus for the first 11 months and makes it likely that official borrowing forecasts published last weekend may now be too pessimistic.

The figures show an extraordinary €1 billion inflow of capital gains tax during the month, which has helped push total tax revenue in the first 11 months to €29.795 billion, up 10 per cent on the same period last year. The Exchequer recorded a surplus of €842 million for the first 11 months, compared to a deficit of €2.12 billion at the end of October.

While the November figures were boosted by a one-off gain due to a change in the collection schedule for capital gains tax, the figures published just last weekend by the Department of Finance for borrowing this year now look pessimistic.

In its pre-Budget White Paper, the Department predicted that total borrowing would be €1.5 billion this year and that borrowing under the EU general government deficit calculation would be €605 million. The EU measure is lower as it excludes money borrowed for payment into the National Pension Reserve Fund.

While the Department was last night sticking with its 2003 forecasts,a substantial undershoot now seems inevitable, according to Mr Colin Hunt, economist with Goodbody stockbrokers, even if the Government manages to spend significantly during the month of December.

Capital spending is still way below target, running at €3.7 billion in the first 11 months, 16 per cent below 2003.

The strength in tax revenue in November goes beyond capital gains tax, with revivals also in income tax and other tax headings.