Last year, the Exchequer recorded a surplus of €1.2 billion, down €3.8 billion from 2022. Although there was a growth in tax revenues, this was offset by increases in public expenditure as well as the transfer of €4 billion to the National Reserve Fund.
Commenting on the figures, Minister for Finance Michael McGrath TD noted:
“The end-year figures show an Exchequer surplus of €1.2 billion in 2023. Tax receipts came in largely as anticipated and reflect the underlying strength of our economy, especially the labour market.
It must be acknowledged, however, that the budgetary surplus includes windfall corporation tax receipts which, if excluded, would result in an underlying deficit. In this regard, it is important to stress the more modest growth rate in this revenue stream over the past year as well as the inherent volatility in these receipts.
Indications are that pandemic-era surge in exports in a small number of sectors – which drive corporate profitability in Ireland – are now unwinding; this would mean more modest growth in corporation tax receipts in the coming years.
These developments underscore the importance of ensuring that permanent fiscal commitments are not made on the basis of transitory revenues. The establishment of the two new-long term savings vehicles (the Future Ireland Fund and the Infrastructure, Climate and Nature Fund) will allow us to prepare for future structural challenges while limiting our exposure to volatile windfall revenues.
At the same time, Government continues to invest in public services and in boosting the productive capacity of our economy.”
For more information, you can read December’s Fiscal Monitor.