The deficit for this year is expected to be over €21 billion, or six per cent of GDP, the Minister for Finance Paschal Donohoe indicated today, as the massive costs of the pandemic to the public finances begin to bite.
The Minister for Public Expenditure Michael McGrath said that gross voted expenditure this year would be more than €86 billion, the largest bill for running the state in its history, pushed up by about €16 billion of extraordinary measures to deal with the pandemic.
The two men were speaking at a press conference at Government Buildings this afternoon in advance of the publication of the budgetary white paper this evening. The Budget takes place next Tuesday.
Mr Donohoe said that at present officials are expecting a deficit of €14.5 billion next year, or four per cent of GDP though that number will increase with the extra expenditure to be announced in next week’s budget.
All the money required to fund the deficit this year and next will be borrowed and added to the national debt, the ministers confirmed.
Mr Donohoe also confirmed that the projected deficit for this year would increase if the current level of public health restrictions is tightened. “If further decisions are made, that figure would grow and grow and grow,” he said.
Both ministers also warned of the economic costs of reintroducing a lockdown, with Mr Donohoe stressing the dangers to employment levels. “We need to take great care with such a decision,” he said. “The impact would be immediate and severe,” Mr McGrath said.
In answer to questions, Mr Donohoe also launched a strong attack on Sinn Féin. He said that the reason that the Government was in a position to borrow such huge amounts at present was that it had slowly and painfully rebuilt the public finances after the crash, returning to a surplus position in recent years. He said Ireland was now seen as creditworthy by the people from whom it was borrowing money and that "Sinn Féin were against all the moves that were necessary to get to this point."
