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Exchequer deficit was €7.5 billion in April - more than double this time last year

Finance Minister Paschal Donohoe described it as a ‘sharp deterioration on the public finances”.

Image: Shutterstock/Africa Studio

THE IMPACT OF the Covid-19 pandemic is continuing to stretch the national pursestrings after the Exchequer recorded a deficit of €7.5 billion in April. 

A significant increase in spending on health and social welfare led to the deficit of €7.47 billion up to the end of April – more than double the €3.19 billion recorded to the end of April in 2019. 

Tax receipts for the month of April were down 8% to €2.5 billion, mainly due to a decline in income tax and excise receipts – overall, tax receipts were down around 0.6% or €86 million for the year. 

Finance Minister Paschal Donohoe described it as a “sharp deterioration on the public finances” as a result of the Covid-19 pandemic. 

“Today’s figures bear that out, with a fall in tax revenues and increase in expenditure. As I have said before, it is entirely appropriate that the Government uses fiscal policy to cushion the effect of the crisis in this way,” he said. 

“It is a vital tool in helping to support individuals, businesses and communities through this difficult period. We began this crisis with the public finances in good health – a budget surplus, cash balances and reduced debt – all grounded in an economy that was growing strongly.”

The latest figures come just days after the Government laid out a roadmap to bring the economy out of hibernation following strict measures to restrict the public movement over the past two months. 

On Saturday, the Government also outlined additional supports for businesses, including a €10,000 restart grant for eligible businesses as well as a three-month commercial rates waiver.

It also announced a €2 billion Pandemic Stabilisation and Recovery Fund for medium and large enterprises, and a €2 billion Covid-19 credit guarantee scheme to support lending to SMEs. 

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