DAVY VIEW

Yesterday’s Budget for 2022 showed that political pressures to spend the unexpected strong performance of tax revenues in 2021 have been resisted. Hence, the deficit is expected to be €13bn (5.9% of GNI*) in 2021, falling to €8.3bn (3.4% of GNI*) in 2022. Nonetheless, spending is still targeted to rise by 5.5% next year to deliver ambitious plans for health, housing and infrastructure. Support for the economy is being maintained, income taxes cut, welfare payments increased and the wage subsidy scheme extended.