Irish Economy: The Exchequer deficit was €11.5bn in 2013, €3.4bn
lower than 2012. Total tax revenue and the net voted expenditure outturns were
broadly in line with targets. The decline was boosted by €2.3bn, with the sale of
Bank of Ireland's CoCo bonds raising €1bn and the Irish Life sale resulted in
an inflow of €1.3bn.
However, this was offset by the loss of income of a similar amount following the
expiration of the State bank guarantee.
The interest on the national debt rose 25% to €8.1bn.
Tax receipts were €37.8bn, €144m (0.4%) off
target but up €1.16bn on 2012; corporation tax was 3.3% ahead of
target at €4.27bn, while stamp duties were 13.5% above at €1.34bn.
VAT receipts were €224m, or 2.1% below the 2013 target
while provisional VAT
receipts for December were €122m, or 57.7% off target, which the Department of
Finance said was likely related to VAT rebates on import stock building; VAT
receipts for the crucial Christmas trading period will be included in January
Income tax receipts were down €102m (0.6%) in
2013 and 2.6% in December. However, within the income tax category, the
Department said that PAYE and Schedule D tax was up €60m for the year, while
DIRT was down €162m. Year-on-year income tax recorded an increase of €582m
Local Property Tax receipts of €30m were received
in December bringing the total collected during 2013 to €318m.
Net expenditure was €321m, or 0.7%, below target,
down 4.2% on 2012 and the cost of servicing the national debt for 2013 was
€8.1bn. This is €1.6bn (24.9%) higher than 2012. The Department said this
reflects the increase in stock of the National Debt generally, including the
first interest payment on the floating rate bonds issued in February to replace
the IBRC (Anglo Irish Bank/Irish Nationwide) Promissory Note, as well as some
David McNamara, economist at Davy,
commented - - "On the expenditure side, the slippage in the Department of Health
of €138m (+1%) was not enough to push total current spending above target. Net
current spending was €289m, or 0.7%, below target. Capital expenditure came in
€32m, or 1%, below target.
While we will not get the official General Government Balance for 2013 until
later in the year, today’s exchequer out-turn means that the government should
comfortably beat its deficit target of 7.5% of GDP this year. We expect the
final General Government Deficit to come in below 7% for the year, and this
provides a solid base to hit its 2014 target of 5.1% of GDP; we expect it to
come in at 4.8%."
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