STRONG economic growth is leading to more jobs and boosting the Exchequer's finances, according to the latest official figures.
Exchequer statistics for the first half of the year show strong growth in income tax and VAT, indicating the Government should easily beat its borrowing target for the year. Official data from the Central Statistics Office show the economy grew by more than 7 per cent last year, the fastest growth rate in the EU.
The Exchequer figures indicate growth remains strong this year and employment is continuing to rise. Income tax receipts are running more than 10 per cent ahead of last year, well ahead of the 6 per cent Government target. Forecasters believe total employment should now at least match last year's record growth of over 50,000 jobs.
VAT receipts are also way ahead of official expectations, as are receipts from excise duty, pointing to strong consumer spending. This was further confirmed by the latest figures from the Society of the Irish Motor Industry, which show new car sales in the first six months of the year were 84,539, 35 per cent ahead of last year.
Despite strong tax trends, the Government reported a sharp rise in Exchequer borrowing in the first six months of the year.
Department of Finance figures published yesterday show the Government borrowed £455 million in the first half of 1996, some £300 million more than in the same period last year.
However, Department officials insisted timing factors, including the late receipt of EU funds and delays in processing corporation tax receipts, were responsible for the higher borrowing level. They forecast that for the full year the Government's borrowing requirement would come in £150 million below the annual target of £729 million.
"The overall financial position is looking good. We expect it to continue to look good for the rest of the year," said Mr Michael Tutty, Second Secretary at the Department of Finance.
Reacting to the figures, Fianna Fail's spokesman on finance, Mr Charlie McCreevy, said it was evident while higher growth in the economy was reflected in a higher tax take, much of this growth was eaten up by excessive increases in Government spending.
The figures show Government spending ahead of target in the first half of the year, with current spending reaching £6,181 million, up 10.2 per cent compared with the same period last year.
Mr Tutty said much of this increase was due to a higher than expected level of unemployment, increased EU beef fines and costs incurred as a result of the BSE scare.
The CSO figures show Gross National Product grew by 7.3 per cent last year, a similar rate to 1994, and representing a two year period of unprecedented growth. Last night, economists described the 1995 figures as "remarkable", particularly as all profits earned by multinationals were excluded for the first time.
One of the main motors behind the growth was a boom in the computer sector, where output rose by nearly 38 per cent.