No matter how you look at the figures, putting a positive slant on the state of public finances is a tall order, writes Una McCaffrey.

The Exchequer figures for July, released yesterday by the Department of Finance, make unappetising reading for anybody harbouring concerns about the state of the public finances.

It was not that they threw up any nasty surprises but they confirmed what has been brewing for months: Government spending is hurtling so fast that it could be on the point of tripping itself up.

The figures showed that public expenditure for the first seven months of this year has been 22 per cent higher than it was for the same period of 2001. At the same time, the revenue raised by Government to pay for this spending has been, at best, registering near-static growth. Income tax, which comprises almost one-third of all money contributing to the public coffers, is shown by the latest data to have declined by more than 11 per cent between January and July, when compared to last year.

Increased corporation tax receipts, one of the few saving graces contained within the figures, can be attributed largely to good timing - the fact that June ended on a weekend meant that some corporation tax revenues for that month spilled into July.

Numbers are, by their nature, open to variations in interpretation and manipulation but, no matter how you look at things, it seems like a tall order to put a positive face on the trends at play in the Republic's balance sheet.

Put simply, weak revenue growth and strong spending just don't go together, particularly at a time when the economy is sluggish and showing few signs of picking itself up.

The Minister for Finance, Mr McCreevy, is, as has been evidenced on countless occasions in the past, no fool when it comes to handling the public purse strings.

He has shown on numerous occasions that he is capable of pulling rabbits out of hats, usually when it looks most unlikely.

As we mark the end of the first month in the second half of the year, the time must surely be approaching for him to perform such magic again, particularly if he is to have any chance of achieving the €170 million surplus target that he has repeatedly set himself.

He has already called the Government troops to order, preparing to foist upon them spending cuts of €160 million and deciding to raise a further €140 million in additional charges.

That is a start, but it remains hard to see how the mismatch between Mr McCreevy's forecasts and those of almost every other observer can be reconciled.

The ESRI predicted just last week that the public finances would be €900 million in deficit by the end of the year - and that was dependent on tax receipts growing by 6.1 per cent.

Based on the latest numbers, one economist said that even a slightly pessimistic view could easily foresee a deficit of €1.5 billion.

The same commentator acknowledged however that too much emphasis could be placed on surpluses and deficits and how they were perceived. He hoped that the Minister would not concentrate too much on finishing the year with no borrowing on his plate, and that he would focus on developing a long-term plan for economic stability. Short-term fixes, he said, were usually inefficient.

The other worrying factor that came to light yesterday was the declining trend at work in the Republic's labour force. The 17 per cent year-on-year rise in numbers claiming unemployment benefit led employers' lobby IBEC to criticise wage growth, which it says stands at three times the EU average.

All things considered, it looks like the time is right for a bit of McCreevy magic.