Prior to Covid, Government generated budgetary surplus of €1.9bn

Prior to the Covid-19 pandemic, the Irish Government generated a budgetary surplus and saw debt as a percentage of income fall to its lowest level in more than 12 years.

Government finance statistics, published by the Central Statistics Office, show the Government generated a surplus of €1.9 billion in 2019, 0.5 per cent of gross domestic product (GDP).

The figure is expected to morph into €21 billion deficit this year, with spending on Covid-related wage and health supports soaring and a fall-off in tax revenue, particularly VAT.

The CSO figures show revenue mainly from tax receipts increased by €5 billion last year, while spending rose by €3.5 billion.

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This resulted in an improvement of €1.5 billion over the 2018 surplus.

The figures show Government debt fell to 57.4 per cent of GDP in 2019. Gross debt stood at €204.2 billion last year, compared to €205.9 in 2018.

Gross debt is also expected to rise considerably this year as the Government borrows to pay for Covid-related expenditure.

The National Treasury Management Agency (NTMA) sold an additional €1.5 billion of bonds, mainly at negative yields, last week.

The auction brings to €22.75 billion the amount the NTMA has raised on the long-term debt markets so far this year.

In May, it set a funding target of €20 billion to €24 billion to help deal with the cost to the exchequer of the pandemic.