Ireland has revised downwards its 2011 underlying budget deficit to 9 per cent of gross domestic product, the Department of Finance said today.

The deficit figure, which excludes the €5.8 billion used to recapitalise the banking system last year, was lower than both the 10.6 per cent target set under the EU-IMF bailout programme and the 9.4 per cent figure published by the Department of Finance in April.

The Central Statistics Office confirmed today that Government spent €20.2 billion more than it took in last year, €360 million below the most recent Department of Finance estimate.

Despite this, as a percentage of gross domestic product, the deficit was 12.7 per cent, the largest in the EU. This compares to Greece, the country in second  place,  whose deficit stood at 9.1 per cent last year.

The "General Government" figures provide the most comprehensive measure of taxation and spending. Both are considerably larger than the better known Exchequer figures because they include, among other things, social insurance contributions and local government spending.

Because these figures are compiled on an internationally comparable basis, they are also the most closely observed by, among others, the troika and international investors.

Additional reporting: Bloomberg