OECD report criticises Irish public finances

The Organisation for Economic Co-operation and Development (OECD) has criticised the deterioration in Irish public finances.

The Organisation for Economic Co-operation and Development (OECD) has criticised the deterioration in Irish public finances.

In its Economic Outlook report published today, the organisation said: "The shift in fiscal stance from sizeable structural surplus to small deficit has been inappropriately large".

The Paris-based group blamed the shift on "a weakness in the budgetary system".

On Tuesday an ESRI report forecast the Government's finances would be €727 million in the red by the end of the year, rising to €1.9 billion next year.

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"Current public expenditures need to be better managed to avoid the choice of either allowing further fiscal slippage or cutting infrastructure investment," the OECD said.

In its report it predicted exports would rise over the year, supported by robust public and private consumption, and that GDP would grow by 3.5 per cent this year and 6.3 per cent next year.

It said: "Inflation is likely to slow, while remaining well above the euro area average due to rapidly rising prices for domestic services".

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times