Surplus of over €16bn estimated for State for next year

A surplus of €16.2 billion is predicted for next year, according to the Government’s latest economic forecasts and projections for the public finances.

The figures underline the extent to which the Government will have significant cash to spend in the budget and next year as it prepares for a general election, expected in the second half of next year or early 2025.

The document forecasts an exchequer surplus of €12.9 billion for next year. However, when other factors, including a large surplus in the social insurance fund are included in the calculations, the General Government Balance - the figure used by the EU - is expected to be €16 billion.

However, these figures are likely to be adjusted later in the year when spending decisions for next year are made.

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The surplus is driven by continuing strong corporation tax receipts. The projected surplus for this year is likely to be about €10 billion, including transfers to the Government’s rainy day fund.

The Stability Programme Update, a key economic document required under EU rules, was published by Minister for Finance Michael McGrath and Minister for Public Expenditure Paschal Donohoe on Tuesday.

Last year, between recurring spending commitments and one-off giveaways, the Government was able to deliver a Budget Day package of more than €11 billion. The figures published yesterday show that Ministers are likely to be in a position to repeat last year’s giveaway this year.

Both Mr McGrath and Mr Donohoe were at pains to play down talk of big Budget giveaways at the announcement of the results yesterday.

They warned in particular of the unreliable nature of much of the corporation tax receipts and the danger of building recurring spending commitments on the back of revenues that may be temporary.

“Half of the corporation tax receipts are windfall in nature and we can’t rely on these,” Mr McGrath said.