Last week, the Government published its Summer Economic Statement (SES) 2023. The document sets out the Government’s medium-term budgetary strategy and outlines the fiscal parameters within which discussions will take place ahead of Budget 2024.
On the basis that inflation, though easing, is expected to remain high, Government is adjusting its fiscal parameters for Budget 2024. To protect public services, core spending will now increase by 6.1 percent next year. Over the medium term (2025-2026), as inflationary pressures moderate, core expenditure growth will return to 5 per cent per annum.
Budget 2024 will provide an overall package of €6.4 billion, representing additional public spending of €5.2 billion and taxation measures amounting to €1.1 billion. Given significant capacity constraints in housing, healthcare, and other key public infrastructure, as well as an economy clearly at ‘full employment’, the Statement says that any spending beyond this would risk unnecessarily adding to inflationary pressures and overheating the economy. The statement does note that a key priority of taxation policy in the forthcoming budget will be to avoid workers paying additional tax simply because they move to the higher tax brackets due to wage growth.
The Budget will be presented to Dáil Éireann on 10 October 2024. Commenting on the document, Minister for Public Expenditure, NDP Delivery and Reform, Paschal Donohoe T.D., said:
“Today’s publication of the Summer Economic Statement outlines our budgetary strategy for 2024. In planning the fiscal and budgetary response, the Government will continue with the balanced approach of supporting society while being conscious of fiscal sustainability and being mindful of the need to avoid adding to inflationary pressures. Our economy and people continue to show resilience, and this has helped us to respond to the challenges that we have faced over the past number of years.”
Further information is available on gov.ie.
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