Dáil Éireann Debate, Thursday - 28 April 2022
69. Deputy Éamon Ó Cuív asked the Minister for Finance the most up-to-date projected Exchequer deficit for 2022; the way this compares with the forecasts on budget day; the main reason for the change in forecast; and if he will make a statement on the matter. [20988/22]
Amharc ar fhreagraMy Department updated its fiscal projections in the Stability Programme Update earlier this month.
An Exchequer deficit of €1.1 billion is now forecast for this year; this compares with the Budget 2022 projection of €7.7 billion.
The main driver of the improvement is stronger projections for tax revenue. My Department now expects tax revenue to amount to almost €76 billion this year, an upward revision of over €5½ billion compared with that set out in Budget 2022.
The upward revision in the tax projection is due to two factors. First is the better-than-expected outturn for last year, which was driven by strong income and corporation tax receipts. Secondly is the very strong momentum in tax receipts in the first quarter of this year driven by VAT, income tax and corporation tax.
The better-than-assumed budget deficit has helped to partly offset the increase in public debt during the pandemic - in other words, the increase would have been significantly higher but for the revenue surprises.
Nevertheless, public debt still stood at €236 billion - or nearly a quarter of a trillion euros - at the end of last year. On a per capita basis, this is one of the highest figures in the world. With sovereign borrowing costs now rising, it is crucial that we put the debt-income ratio on a downward trajectory.
