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Ireland To Boost Budget Package On Projected 2022 Surplus: Source

Ireland will forecast that it will run a small budget surplus for 2022 versus the deficit previously anticipated when it publishes the parameters for the 2023 budget later on Monday that will permit significantly higher spending, a source said.

Ministers are set to agree to increase the budget package to €6.7 billion ($7 billion) from the €4.5 billion previously available to help offset some of the effects of soaring inflation, Junior Trade Minister Robert Troy told RTÉ.

The source familiar with the process, who spoke to Reuters on condition of anonymity, added that this will necessitate the temporary suspension of a new rule introduced last year tying core government expenditure growth to the nominal growth rate of the economy.

Day-to-day spending will rise by 6.7% next year, the source said, up from 5% anticipated a year ago.

Domestic Demand

Irish inflation, however, hit a new almost 40-year high of 9.6% in June, Eurostat said last week.

Almost half of the €6.7 billion package is needed just to meet spending on existing levels of service, investment plans and demographic costs, while €1 billion has been earmarked for income tax cuts.

The unallocated remainder left for further spending will need to cover any new public sector pay deal agreed by trade unions and government.

One-Off Measures

Talks between the two sides ended without agreement last month and have yet to restart.

Further one-off measures to help people deal with higher energy bills in particular will be introduced on top of the €6.7 billion package, the source added.

Ministers, who are also considering bringing the budget forward to September from mid-October, have said the it could include cuts in childcare and university fees, an extension of temporary cheaper public transport fares and a range of welfare increases for poorer households.

Read More: Budget 2022: The Grocery Retail Industry Responds

News by Reuters, edited by Donna Ahern, Checkout. For more Retail stories, click here. Click subscribe to sign up for the Checkout print edition.

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