Government to set out latest fiscal projections in annual stability programme update

Document expected to present relatively upbeat assessment of economy

The Government may set up a National Reserve Fund to invest corporation tax windfall gains. Illustration: Dean Ruxton

The Government will later today publish its annual stability programme update (SPU), setting out its latest economic and fiscal projections for the year ahead.

The document, an annual filing to the European authorities, is expected to present a relatively upbeat assessment of the economy as inflation eases and consumer spending rebounds from an acute cost-of-living squeeze.

The Irish economy is forecast to grow at a more moderate, but still healthy, 2-3 per cent in the coming years. That’s presuming there aren’t any shocks around the corner, a big presumption in the current era of “permacrisis”.

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However, the focus will be more on the Government’s fiscal position in advance of the budget and whether it plans to again breach its own 5 per cent spending rule next year.


The spending rule seeks to keep the annual increase in Government spending below a 5 per cent ceiling, which is viewed as sustainable for the Irish economy. It was adopted in 2021 but has been broken every year since.

A significant breach in 2025 could mean the Government is planning an expansionary budget before calling an election. While Minister for Finance Michael McGrath will want to present himself and the Coalition as fiscally prudent, budgets, especially those on the eve of elections, tend to take on other objectives.

The SPU will also contain the Government’s latest projections for corporation tax, which is already down by 25 per cent so far this year following last year’s record €23.6 million haul. At the publication of exchequer returns for March, Mr McGrath blamed the fall-off on “timing issues” while predicting it would be made up later in the year.

The Department of Finance might also reveal how it thinks the move to a minimum global rate of 15 per cent (for big multinationals), up from the State’s headline rate of 12.5 per cent, will affect receipts after 2026 (firms don’t have to start paying until 2026 even though they are liable from this year).