Ireland Agrees Final Budget Package Before General Election
(Bloomberg) -- Ireland’s government has agreed its final budget package before the elections, breaching its own fiscal rule as it increases public spending.
Most Read from Bloomberg
Saudis Warned G-7 Over Russia Seizures With Debt Sale Threat
The End of the Cheap Money Era Catches Up to Chelsea FC’s Owner
NYC Penthouse Sells for $135 Million in Priciest Deal Since 2022
The plans amount to €8.3 billion ($9 billion), according to Tuesday’s Summer Economic Statement, comprising €6.9 billion of additional public spending and €1.4 billion on tax measures. The government raised total expenditure by 6.9%, putting it down to a larger-than-assumed population, despite having set itself a 5% annual overall spending increase.
That’s something the central bank has already warned the government against doing. However, the executive faced a trade-off between not overheating an economy nearing capacity and bestowing voters with giveaways before elections that must be held by March 2025.
The government insisted voters won’t go to the polls before next year, but the move to bring the budget forward by one week, to Oct. 1, suggests an election could come in the autumn just after the fiscal event.
“The revised fiscal parameter set out in the summer economic statement will be consistent with surplus of just under €6 billion next year,” the Finance Minister Jack Chambers told reporters in Dublin. “A package of this size strikes a balance: it provides government with the scope to enhance our public infrastructure and improve public services while maintaining the long-term sustainability of the public finances.”
Last week, central bank governor Gabriel Makhlouf also touched on the need of getting the right balance, saying in his annual pre-budget letter that this is need to “avoid the risks of overheating and damaging the competitiveness of the economy.”
(Updates with finance minister in fifth paragraph)
Most Read from Bloomberg Businessweek
At SpaceX, Elon Musk’s Own Brand of Cancel Culture Is Thriving
Family Offices of the Ultra-Rich Shed Privacy With Activist Bets
©2024 Bloomberg L.P.
