DAVY VIEW

Given today’s buoyant exchequer returns, with corporate taxes €748m ahead of target, the Minister for Finance has revised up his forecast for a surplus of €1.4bn (0.4% of GDP) in 2019. We still think this is too conservative and that the final balance will be closer to €2bn (0.6% of GDP). The minister also announced new fiscal targets; a surplus of 1% of GDP and debt/GNI* ratio of 85% by 2022. Given our forecasts, most of the work is already done to achieve the surplus target.