With a record surplus of almost £3 billion in its coffers at the end of June, the Government has again revised its budgetary arithmetic, as rapid growth pushes the economy into unprecedented financial territory.
Increased spending will reduce the £3 billion figure as the year progresses, but the Government now estimates that the overall surplus of income over expenditure at the end of the year will reach a record £1.8 billion - £200 million more than earlier forecasts. The surplus will go towards reducing the national debt.
The figures are even more buoyant when EU measurements are applied. EU calculations do not take into account - among other things - the £640 million to be paid into the State pension fund account and, at this stage, are expected to show a surplus of £3 billion, or some 4 per cent of GDP.
The figures are being fuelled by rapidly-expanding employment, rising wages and record sales of new cars. Taxes are ahead of expectations across all headings, with the exception of corporation tax, which has been coming in slower than anticipated.
Such is the health of the State's finances, according to Mr Jim Power, chief economist at Bank of Ireland, that the Government is still underestimating growth in the economy. He believes that the surplus at the end of the year is more likely to be £2.2 billion.
At the end of June the overall Exchequer surplus was running at £2.93 billion, up 45 per cent from £2.02 billion at the same time last year. But Mr Michael Tutty, second secretary at the Department of Finance, says that this will fall back rapidly over the remainder of the year as capital expenditure increases.
Overall tax revenue was up 14.5 per cent at the end of June, compared with a Budget prediction of 8.6 per cent. The Department now expects growth in tax revenue of about 12 per cent as the Budget tax package slows down receipts in the next six months.
Taxes were up across all areas. Income tax was up 15 per cent, well ahead of expectations, including a 4.5 per cent Budget day target. The rise reflects rapid employment growth as well as wage rises. VAT was up 20.5 per cent, reflecting strong retail and car sales, while stamp duty was up 29.8 per cent, from an estimate of 21.1 per cent, as house prices continued to rise.
Excise duties were just on target at 7.3 per cent. However, these usually grow rapidly at the end of the year and are likely to finish ahead of expectations.
The exception was corporation tax, which was up 8.3 per cent, compared with a target of 16.4 per cent. According to Mr Tutty, this is likely to pick up slightly over the remainder of the year, although it may still finish below target.
Estimates for spending have also been revised upwards. These are currently running at 7.8 per cent from an end-year Budget target of 9 per cent. However, an additional £240 million has been added to the target figure, largely because of increased pay of £120 million from the Partnership for Prosperity and Fairness and a delay in receiving funding from the European Social Fund.
Pressure in areas such as health has been offset by savings in the social welfare budget, according to Mr Tutty.
The capital spending budget is also likely to be £210 million ahead of the Department's prediction, largely because of the costs of providing housing for asylum-seekers and spending on roads and sanitary services.