DAVY VIEW

Exchequer returns for Q1 2019 show the public finances €461m ahead of Budget 2019 targets. This is consistent with our forecast for a surplus of €1bn, or 0.6% of GDP, in 2019. However, the bigger picture is that buoyant tax receipts, up 7% in Q1 2019 compared with last year, are predominantly being used to boost public spending by 6.6% rather than build budget surpluses.