The economy has started the year strongly, according to the latest Exchequer figures. Tax revenues were ahead of target in January, with excise duties levied on buoyant new car sales seen as a significant contributor.
Government receipts for the first month of the year were €3.67 billion. Tax revenues of €3.47 billion made up the bulk of this, and were some €81 million ahead of target. Expenditure during the period also came in at €3.25 billion. Voted spending by Government departments was €2.89 billion of this, against a budget target of €2.99 billion. Overall there was a surplus in January of €419 million.
Dr Dan McLaughlin, chief economist with Bank of Ireland, said: "There is nothing to make you think anything other than that the economy started the year strongly." He highlighted the healthy income tax and excise duty receipts as indicators that the strong growth experienced by the economy in the last quarter of 2004 had carried over into the new year. The only question mark was over VAT receipts, which were "quite soft" and came in some €6 million under target at €1.672 billion, he said.
"It is comforting that tax receipts are ahead of projection," said Mr Oliver Mangan, economist with AIB Group Treasury. The figures conformed with other indicators that there had been a good start to the year, such as car sales and housing starts, he said, and expenditure was behind schedule. If this trend continued, the end-of-year Exchequer position would be better than predicted, he said.
The Department of Finance projects a borrowing requirement for 2005 of about €3 billion, while AIB believes the figure could be closer to €2 billion.
The income tax take in January was €945 million, compared to €820 million last January and a target of €950 million. Stamp duty revenues of €200 million were ahead of target (€190 million) and of last year's figure of €157 million. Corporation tax inflows were €84 million and were also ahead of the target of €77 million, and of last January's figure of €61 million.
