Tuesday, June 8, 2010

Update on the Irish economy

Economic forecasts are emerging that suggest that Ireland has moved slightly from recession.  The number on the Live Register, 437,922, is at a record high as is the national debt.  Interest payments are eating up a much greater proportion of income taxes.

Current Revenue and Expenditure

Exchequer revenue for the first five months of 2010, at €12,293,887, is 10.4% les than for the first five months of 2009

Current expenditure for the first five months of 2010, at €19,535,867, is 3.1% less than for the first five months of 2009.

The current account deficit at the end of May 2010 equated to 59.8% of tax revenue and in the corresponding period it was 47.6% of tax revenue.

Current spending is reducing but tax revenue is reducing even more.

Capital Revenue and Expenditure

The deficit on capital account, at the end of May 2010, €624,759, compares to a deficit of €4,141,336 in May 2009.

Some €3 billion of this change is accounted for by the front loading of a payment of this sum to the National Pension Reserve Fund in 2009.  Job creation is dependent on a combination of advanced technology, reliable infrastructure backed by the investment to sustain its reliability as well as adequate flows of investment capital over a prolonged period.

Exchequer Deficit

The exchequer deficit at the end of May 2010 was €7,866,739, representing an improvement on May 2009 when it was €10,587,645.

National Debt

Our national debt has doubled from €44 billion at the beginning of 2009 to approximately €90 billion at the end of May 2010.

Year National Debt € Million Interest €Million % Income Taxes
2005 38,182 1,720.39 15.2%
2006 35,917 1,859.88 15.0%
2007 37,560 1,618.28 11.9%
2008 50,398 1,543.88 11.7%
2009 75,152 2,547.16 21.5%
2010/5 82,000 1,856.03 43.9%

Interest on National Debt

The interest on our national debt for the first five months of 2010 was €1,856,063 – 15.3% of tax revenue and 23.6% of the exchequer deficit.

Interest on the national debt for all of 2008 was €1,543,383. That represented 3.8% of 2008 tax revenue and 12.1% of the 2008 exchequer deficit.


There is some evidence that we are treading water insofar as some expenditure cuts are taking effect. Tax revenues are still declining compared to the prior comparable period but the rate of decline has moderated from 19% when 2009 as a whole is compared to 2008 to 10.4%.

Welfare spending is 13% higher and the social insurance fund is reportedly seriously insolvent.

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