First Budget surplus for State since 2007 as ‘lost decade’ took toll on national purse
The State eked out a Budget surplus of €50m last year, its first since 2007.
The latest financial data shows rising tax revenues offset a 7.5pc surge in the wage bill of Government employees to €22.2bn, or 27pc of total spending.
Data from the Central Statistics Office released yesterday showed how the wage bill for State employees has risen since the 2013-15 period during which they were capped below €19bn. The number of Government employees had risen to 399,700 by the end of the third quarter of last year, from 379,700 at the end of 2015.
Overall the Government recorded a 7pc rise in revenues, much of it from company taxes that outstripped a 6pc hike in spending from 2017 levels, and the tax take rose by €4.7bn from 2017 levels to €60.6bn.
Despite the hefty rise in spending, which rose 6pc last year, it now accounts for just over a quarter of gross domestic product (GDP), down from the more than 40pc peak hit in 2013 in the wake of the financial crisis.
Debt interest service costs have fallen too, despite a rise in the level of gross debt, and they stood at €14.3m a day, down from €15.8m a day in 2017 as the National Treasury Management Agency refinanced debt at lower interest rates and for longer maturities.
The gross debt level rose to €206.2bn at the end of 2018 from €201.4bn in 2017, although strong economic growth last year cut the debt to GDP ratio to 64.8pc, down from 68.5pc in the previous year.
That still places Ireland above the 60pc level mandated in the European Union’s Stability and Growth Pact, but the ratio is moving in the right direction.
The Budget surplus for last year means the State will join 13 other EU countries who ran a budget surplus in 2017.
Analysis from the Department of Finance shows that debt reduction is far more sensitive to economic growth than it would be to a rise in interest rates.
Growth here is expected to be in the region of 4pc this year, depending on the terms on which Britain leaves the European Union.
The immediate risk of a hard Brexit has fallen sharply as the EU has extended talks until October 31.
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