The Minister for Finance, Mr McCreevy said today that although the Exchequer surplus could be up to £500 million lower that predicted, Ireland is still not heading into a recession.
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The Minister for Finance, Mr McCreevy
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In a statement this afternoon on Exchequer returns for the first half of the year, Mr McCreevy said that the Exchequer surplus is £2,608 million, equivalent to £2,490 million when sales of state assets and payments into the National Pension Reserve Fund are excluded.
This compares to a surplus of £2,934m for the same period in 2000, or £2,931m exclusive of once-off factors.
"The performance to date suggests that the outtrun for the Exechequer surplus, excluding the sale of state assets could be approximately £500 million than forecast on budget day," the Minister said.
However, officials for the Department of Finance said that despite the drop in expectations, the economy was still growing albeit slower than it did over the course of 2000.
The figures show that in the first six months tax inflows at £11,3000 (euro 14,348) million amounts to 47 per cent of the Budget target. This is an increase of 5.3 per cent over the first half of 2000. compared to a budget target of 12.5 per cent over the 2000 outturn,
The lack of buoyancy, the officials said is especially apparent in indirect taxes particularly in excise duties which are show a decrease of 2.7 per cent over the same period in 2000.
Furthermore, the restrictions necessary to counter-act the threat of Foot-and-Mouth Disease are a factor in this weakness and these losses are unlikely to be recouped year.
Commenting on the returns the Minister said: "The increase to date in tax revenue receipts of 5.3 per cent is below target but should improve as the year progresses.
"Public expenditure continues to be on target and the public finances for 2001 as a whole and into the medium term id for a continuation at the reduced level of the large budget surpluses we have witnessed over the past years."