April Stability Programme Update Published
April’s Stability Programme Update (SPU), published this week, shows the Department of Finance still expect a substantial budget surplus of €8.6bn (2.8% of GNI*) in 2024, driven by a still robust outlook for the Irish economy. Crucially, the Department still believes the unexpected 25% fall in corporate tax revenues in Q1 2024 was a temporary timing effect and will unwind. That said, the outlook for corporate taxes remains uncertain as OECD BEPS reforms have yet to be fully implemented. The SPU also expressed concern that public spending in Q1 2024 was up 15% on the year. Finally, €4bn of the expected €8.6bn surplus in 2024 will be injected into new savings funds, to help meet the long-term costs of aging and other spending pressures, limiting the room for tax cuts and spending measures in October’s Budget for 2025.
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