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Deficit

Ireland's deficit will be largest in eurozone for 2010

Figures released by Department of Finance show forecasts for state income and expenditure in 2010 and 2011.

ACCORDING TO PROJECTIONS made by the Department of Finance, Ireland will have the highest deficit in the eurozone for 2010, at 32 per cent.

Ireland has until 2015 to meet the EU’s deficit target of 3 per cent.

This year’s deficit is expected to be €18.7bn for this year, and much of this figure is understood to be the result of recapitalising the banks.

Paying the interest on national debt will cost €4.8bn this year and €5.1bn next year, RTÉ reports.

Tax revenue is expected to be higher than previously forecast by the government, after November’s better-than-expected tax income for the month.

Tax receipts for the year to date are 1.6 per cent, or €470m, ahead of target. The figure is largely due to a lift in the corporate sector, which balanced the low returns collected from income tax.

The department’s document expects the deficit to be 12 per cent of GDP next year, but public expenditure is forecast to increase. The report says that figures for 2011 are calculated on a pre-Budget basis, without taking account of any of the measures outlined in the four year plan.

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