Dáil Éireann Debate, Thursday - 7 November 2024
87. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he remains satisfied that Ireland, along with its European colleagues, continues on a positive trajectory in terms of fiscal policy; and if he will make a statement on the matter. [46051/24]
View answerAt the time of Budget 2025 last month, a General Government Balance of €23.7 billion or 7.5 per cent of GNI* was projected for this year with public debt, although still elevated, expected to continue on a downward trajectory to €217.2 billion by the end of the year.
The strong position of the Irish economy is best illustrated when compared to other countries in the EU, where debt and deficit positions remain elevated. In 2024, twelve countries are projected to have debt levels above the 60 per cent of GDP threshold, with five of these with levels above 100 per cent of GDP. Similarly, eleven countries are projected to have a deficit above the threshold of 3 per cent of GDP. In contrast, Ireland is one of only four Member States with a projected surplus.
That said, the EU is expected to see some improvement in its aggregate budget balance in 2024. The IMF forecasts the EU aggregate deficit to decline from 3.5 per cent of GDP in 2023 to 3.1 per cent of GDP in 2024. Meanwhile, the debt-to-GDP ratio is projected to rise from 82.1 per cent of GDP in 2023 to 82.7 per cent of GDP in 2024.
However, as I have warned previously, there are underlying risks in our own public finances: the current surplus projections are heavily reliant on windfall corporation tax receipts; in other words, receipts not linked to the domestic economy.
Government has acted to mitigate the exposure of the public finances to this revenue stream, establishing two new long term savings funds, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund. These funds will enable us to prepare for the future structural and fiscal challenges that we know are on the horizon and will also ensure volatile corporation tax receipts are not used to fund permanent spending. By the end of next year, some €16 billion will have been transferred to the two funds.
