Belfast Telegraph

Government rejects debt warning

The Government has rejected a warning by a team of special fiscal advisers that it is in danger of missing its debt targets.

Officials said the exchequer return figures for the 12 months to the end of March show Ireland is on course to reduce its deficit to 8.6% of GDP this year.

However, only hours earlier, the Irish Fiscal Advisory Council (IFAC) warned that the Government may need to save another 400 million euro if it is to reach the EU/IMF goal.

Department of Finance assistant secretary Michael McGrath said the council team was working off older data than its own figures.

"To be fair to the council, its report would have been based on data available up to February," said Mr McGrath.

"The numbers that we are presenting today don't suggest that the targets won't be met. It's still very early days so we will continue to assess and monitor, but on the basis of what we say today."

Mr McGrath pointed out that tax revenues are up 10% from last year, while the exchequer deficit was 2.8 billion euro lower than in March 2011.

That positive outlook came after the IFAC warned that Government growth predictions for the economy are too high and that Ireland may need to make additional adjustments through more taxes or bigger cuts.

While the IFAC suggested the Government make adjustments, chairman John McHale said a mini budget any time soon would be unlikely because the Government has built-in buffers.

"I think it is essential that the 8.6% target is not missed," said Mr McHale. "For the sake of missing it by a small amount, the cost of that in terms of our credibility would be quite high."


From Belfast Telegraph