As the Irish economy continues to recover, tax revenues are pouring in at an unprecedented rate. This has led to the government projecting a budget surplus of €15bn for 2018 and an additional €11bn for 2019. This means that the government will have a total budget surplus of €26bn over two years, a substantial increase from the €1.5bn surplus of 2017. The surplus is expected to bring major benefits, such as additional funding for public services and increased investment in infrastructure. In this article, we will explore the factors that have contributed to this significant increase in tax revenues and the potential impact it could have on the Irish economy.
According to the annual stability programme update that forms part of an EU economic surveillance process, the Government is projected to have a double-digit surplus of €10bn this year and €16.2bn in 2024. This is in addition to the 2022 windfall of just over €8bn. These figures were first reported by RTE News. Earlier today, the Central Statistics Office (CSO) announced that the budget surplus was over €8bn last year, around €3bn ahead of previous estimates, mainly due to a technical EU accounting change. The CSO data reveals that bumper tax revenues and lower spending contributed to the large surplus, with revenues up 16.8% on the previous year, rising to €16.6bn. In 2022, spending only rose by 1.7% to €1.8bn, shifting the budget balance from a deficit in 2020 and 2021 to a significant surplus. The IMF predicts multi-billion euro surpluses out to 2028.
In conclusion, it seems that the future is looking bright for the Irish economy as the budget surplus is set to hit €26bn over the next two years. With taxes rolling in at a steady pace, the government has the ability to invest in areas such as healthcare, education, and infrastructure, which will benefit the country for years to come. While there are always risks and uncertainties that could impact this positive outlook, for now, we can all take comfort in the fact that the Irish economy is moving in the right direction.
