The Irish Government has pledged that its “unprecedented” 18 billion euro budget package will help build a “stronger, more resilient” country.
Unveiling the package, Minister for Finance Paschal Donohoe said Ireland had faced numerous difficulties since independence but never one like Covid-19.
He described it as “an invisible enemy that has caused great suffering”.
The Fine Gael minister said the total value of support measures to date amounts to 24.5 billion euros, nearly eight times last year’s budget plan.
He said Ireland had never responded to a challenge like this in modern times but equally the country had never delivered “such a strong response”.
#Budget2021 is the biggest investment in the history of our State.— Fine Gael (@FineGael) October 13, 2020
It is coming at a time when we need it most to protect the lives and livelihoods of our people and rise to the challenges of #COVID19 and #Brexit.#ProtectingLivesAndLivelihoods #HopeForTheFuture pic.twitter.com/RpTctijH7H
Ireland’s 2021 budget has been framed on two major assumptions: a no-deal Brexit and the continued fight against the coronavirus.
Mr Donohoe said he is anticipating there will be no bilateral trade deal between the UK and the EU, which will reduce Irish growth by an estimated 3%, to 1.75%.
It is also assumed that the coronavirus pandemic will continue in Ireland next year, and the absence of a widely available vaccine.
GDP is projected to decline by 2.5% for 2020 as a whole, with domestic demand falling by 6%.
The Department of Finance is forecasting a total loss of 320,000 jobs in 2020, with an estimated 155,000 jobs to be recovered next year.
Mr Donohoe said a deficit of 21.5 billion euros, or 6.2%, is currently projected for 2020.
While he said this was a “huge figure” by Irish standards, it was similar to what other countries were borrowing.
“What is crucial is making sure that any deficit remains a manageable deficit,” he added.
Budget 2021 forecasts a deficit of 20.5 billion euros or 5.7%.
He also announced the Government will utilise the 2.5 billion euro Rainy Day Fund.
#Budget2021 sets out a framework for the path ahead.The Govt will do its part, &we, as citizens...now need to continue to do our best to combat &then defeat the common enemy; this disease. The stronger our response, the sooner we will complete this journey https://t.co/XBvDfqhrF8 pic.twitter.com/kt8G0tBBtQ— Paschal Donohoe (@Paschald) October 13, 2020
Ireland’s deficit for 2020 remains unclear amid the possibility of further lockdown measures before the end of the year.
Mr Donohoe said the exact figures remain unclear “even at this late stage” because of the possibility of “further containment measures being implemented”.
He said there are limits to the amount of borrowing that would be prudent for the Government to undertake.
“We must manage and reduce our borrowing levels over the coming years to move our national finances back to a balanced position, and to remain well inside Eurozone levels of borrowing,” he added.
Building employment will be “key to reducing our deficit and managing our debt”, the minister said.