The Government surplus of income over expenditure for the four months to the end of April rose to €1.18 billion from €856 million in the same period last year. Tax receipts remained buoyant at €8.16 billion compared to €7.43 billion last time, according to the Exchequer figures released by the Department of Finance yesterday.

The tax data indicate that the effect of the foot-and-mouth disease on economic activity may be wanning, according to Dr Dan McLaughlin, the chief economist with Bank of Ireland.

The total tax take for the four months was up 9.7 per cent year-on-year. This was a significant improvement on the performance in the three months to the end of March, when it was up only 9.2 per cent. The restrictions on movement and other measures introduced following the outbreak of foot-and-mouth in February had a dramatic impact on excise revenues. Excise duties were down 8.5 per cent in the first three months on the same period last year. The comparable figure for the four months to the end of April is a 5.5 per cent reduction, indicating that the worst of the crisis is over.

However, the Minister for Finance, Mr McCreevy is unlikely to achieve his target of a 12 per cent increase in excise duties in 2001 over 2000.

"They are reasonably reassuring numbers. The economy may be slowing somewhat but it has not slipped off a cliff," said Dr McLaughlin.