Exchequer deficit climbed to €14bn by end of February
Exchequer returns for February show that the budgetary situation has now deteriorated by €1.7bn compared to the same period a year ago, due to the decline in tax revenue and the increase in spending.
The figures will show a deficit to the end of February of €14bn on a twelve month rolling basis.
The Minister for Finance, Paschal Donohoe said the figures continue to demonstrate the continuing effect of the Covid-19 pandemic on the public finances.
Tax revenues to date this year are down by €830 million, or nearly 9% on the same period last year;
However, income tax receipts have continued to hold up well and are slightly ahead of their performance last year.
Minister Donohoe said the impact of the pandemic on tax revenue has been most acute on VAT receipts, with VAT revenue down €400m or 13% versus the same period last year.
This, he added, was a reflection of the effect of the public health restrictions on consumption.
Mr Donohoe said he expects as restrictions continue that tax revenues will continue to decline and the state will continue to run “a very significant deficit.”
But he added that there does appear to be some grounds for optimisim regarding the economic performance for the rest of this year.
He said public health restrictions are having an effect on reducing the spread of disease, the vaccination programme continues to gain pace and there is strong resilience in income tax receipts which points to how some companies continue to adapt to the new environment we are now in.
He also pointed to the breadth of economic support in place to support employers, something he claimed is an investment in the recovery.
The figures show that spending by the Department of Employment Affairs and Social Protection was up €1.8 billion year-on-year, mainly due to the cost of the Pandemic Unemployment Payment (PUP) and Employee Wage Subsidy Scheme (EWSS).
Although it continues to grow, Mr Donohoe said the deficit is very much in the middle when compared to other comparator countries.
The figures show that excise duties were down by €130 million, or 15%.
While total net voted expenditure to end-February was just under €9 billion, or 11% ahead on the same period last year.