Latest exchequer returns likely to be positive

Irish exchequer returns for July are due this week, and will likely be good following the rake of upbeat data in recent days.

The last week has been positive for Government, with the unemployment rate hitting a five-year low of 11.5 per cent, and the Central Bank upgrading its growth projections for the economy to 2.5 per cent this year.

The encouraging economic outlook came as the National Treasury Management Agency said it has raised almost 90 per cent of its indicative funding target of €8 billion for this year.

This week’s exchequer figures are likely to feed into debate on the extent to which Ireland should seek, in October’s budget, to cut the deficit by another €2 billion, or go for a percentage target that would mean less in money terms.

With exchequer returns already €1 billion ahead of target in the first half, Davy stockbrokers said it believes the Government needs to take little additional action to hit the deficit target of 3 per cent of GDP in 2015.

The Central Bank of Ireland last week said better than expected exchequer numbers would likely reduce the consolidation needed to hit the 3 per cent deficit target next year.

The exchequer returns for the six months to the end of June, published last month, showed total tax revenues of €18.4 billion, an increase of 4.9 per cent on the same period last year and half a billion euro ahead of target.