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Government records budget deficit of more than 7.4 billion euro

The deficit has increased by more than four billion euro compared to the same time last year.

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The Exchequer has recorded an increased deficit (Niall Carson/PA)

The Exchequer has recorded an increased deficit (Niall Carson/PA)

The Exchequer has recorded an increased deficit (Niall Carson/PA)

The Exchequer recorded a budget deficit of 7,473 million euro at the end of April, more than twice the amount compared to last year.

The Exchequer returns show the continued impact of the Covid-19 pandemic on the public finances.

The Department of Finance said that tax revenues in April were down 8%, or 223 million euro, on April last year.

The latest figures show that the Government’s deficit of 7,473 million euro compared to a deficit of 3,192 million euro in the same period last year.

The 4,281 million euro year-on-year deterioration in the Exchequer balance is primarily driven by increases in public spending.

The total expenditure to the end of April was over 20 billion euro, an increase of 3.8 billion euro, equating to a rise of 23%.

The rise in expenditure reflects increased departmental drawdown in response to the Covid-19 pandemic, particularly in relation to the Department of Health and the Department of Employment Affairs and Social Protection.

Tax receipts for the month of April amounted to 2,552 million euro, a decline of 8% compared to April last year.

This is primarily attributable to a decline in excise and income tax receipts.

The figures show that tax receipts were around 15.4 million euro at the end of April – down 0.6% or 86 million euro annually.

The strong returns in the first two months of the year compensated to some degree for the steep decline in receipts in March and April.

Meanwhile, excise receipts fell 50% year-on-year, or nearly 300 million euro, reflecting reduced consumption and a fall in new car sales (VRT).

The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe said: “The Government’s Stability Programme Update published by the Department of Finance on April 21, outlines a sharp deterioration in the public finances this year as a result of the Covid-19 pandemic.

“Today’s figures bear that out, with a fall in tax revenues and increase in expenditure.

“As I have said before, it is entirely appropriate that the Government uses fiscal policy to cushion the effect of the crisis in this way.

“It is a vital tool in helping to support individuals, businesses and communities through this difficult period.

“We began this crisis with the public finances in good health – a budget surplus, cash balances and reduced debt – all grounded in an economy that was growing strongly.

“The Government is committed to continuing to provide support to ensure our economy recovers as quickly as possible from this crisis.”

PA