Government predicts budget deficit of €21bn this year

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Government Predicts Budget Deficit Of €21Bn This Year Government Predicts Budget Deficit Of €21Bn This Year
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The Government has said it predicts a budget deficit of €21 billion this year.

Speaking at Government Buildings, Minister for Finance Paschal Donohoe said: “We anticipate before any additional decisions are taken on Budget day, and on the basis of current public health guidance, a general Government deficit of just over €21 billion for the year. This would be the equivalent of approximately 6 per cent of national income.”

Mr Donohoe said they are predicting a pre-budget deficit of €14.5 billion next year if no policy changes were made.

“For next year we anticipate a pre-budget deficit of €14.5 billion if there were no policy changes, this is the equivalent of just over 4 per cent of GDP,” he said.

The Fine Gael TD emphasised these figures were subject to “an unprecedented degree of uncertainty with potential further change within 2020 and clearly the potential for significant change in 2021”.

The Minister for Public Expenditure said Government spending for the year was now estimated to be in the region of €86.5 billion.

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Michael McGrath said the figure was driven by additional funding of around 16 billion euro spent on responding to the Covid-19 crisis.

He added that this funding had enabled the introduction of a wide series of measures to support key public services and “cushion as best we can the impact of the pandemic on households and businesses”.

Mr McGrath said the Government predicted that between €8 billion and €8.5 billion will be required, on a no policy change basis, next year to meet ongoing costs arising from the pandemic.

He said the Government’s priority as it finalised Budget 2021 this weekend was to ensure that money was set aside in a recovery fund that could be used to support the economy next year as it responds to Brexit and Covid-19.

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