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Economy to be €500m better off

Brian Cowen

By Brian O’Mahony, Chief Business Correspondent
ECONOMISTS are forecasting the State will be at least €500 million better off at the end of the year than Finance Minister Brian Cowen’s Budget predictions.

In a report yesterday Alan McQuaid of Bloxham Stockbrokers says the deficit for the year will be between €400m-€500m less than the forecast figure of €2,927m projected in Budget 2006.

Davy Stockbrokers’ chief economist Robbie Kelleher said the exceptional nature of the January exchequer figures were glossed over last week due to the publication of the Finance Bill.

As a result of the very good tax take in January the exchequer’s figures for this year was in surplus to the tune of €1.3 billion, compared to €419m at end January 2005.

"It is very early days yet, but the odds on a significant tax overshoot for the year as a whole already look very short indeed," he said.

The month’s figures show the tax take-up was 22% up on January 2005 against the full-year forecast of just over 6%.

Economy watchers will be familiar with revenue targets running well above target in recent years, "but, even by the standards of recent experience, the January returns were remarkable," he said.

There were no exceptional items in the figures, leading economists to conclude the current year will deliver a further significant tax overshoot for the year.

In January 2006 receipts from capital gains and capital acquisitions were both up 63% against a full-year forecast of 4%.

Stamp duties, up 44.9%, are forecast to fall by 1.5% while corporation tax, up over 55%, is set to grow by under 10% for the year.

This one-month outturn highlights the buoyancy in the economy yet again and strong growth for this year and next of 5% is a reasonable bet, economists said.

Looking further out Mr McQuaid sees some threat to the global economy as the US enters a period of slowdown.

Weak US growth has hit the rest of the world in the past, but Mr McQuaid is optimistic enough buoyancy already exists outside of America to deal with it.

His main concern is that the US might dip quite sharply which would put pressure on us all.

But both Asia and Europe are showing signs of growth.

Meanwhile, the emerging market economies have re-fortified following repeated crises in the 1990s and earlier this decade.

"In summary, the global economy outside the US is in its best shape in many years. Japan’s economic recovery is particularly encouraging," said Mr McQuaid.

The corporate sector’s financial health has improved dramatically in recent years. Reforms have strengthened the Japanese banking system, and these initiatives have spurred borrowing for the first time in over a decade.

Corporate sector profits as a percentage of GDP have risen to a level not seen since the 1980s, while wage growth and employment trends are also improving.

 

Economy to be €500m better off

Brian Cowen

By Brian O’Mahony, Chief Business Correspondent
ECONOMISTS are forecasting the State will be at least €500 million better off at the end of the year than Finance Minister Brian Cowen’s Budget predictions.

In a report yesterday Alan McQuaid of Bloxham Stockbrokers says the deficit for the year will be between €400m-€500m less than the forecast figure of €2,927m projected in Budget 2006.

Davy Stockbrokers’ chief economist Robbie Kelleher said the exceptional nature of the January exchequer figures were glossed over last week due to the publication of the Finance Bill.

As a result of the very good tax take in January the exchequer’s figures for this year was in surplus to the tune of €1.3 billion, compared to €419m at end January 2005.

"It is very early days yet, but the odds on a significant tax overshoot for the year as a whole already look very short indeed," he said.

The month’s figures show the tax take-up was 22% up on January 2005 against the full-year forecast of just over 6%.

Economy watchers will be familiar with revenue targets running well above target in recent years, "but, even by the standards of recent experience, the January returns were remarkable," he said.

There were no exceptional items in the figures, leading economists to conclude the current year will deliver a further significant tax overshoot for the year.

In January 2006 receipts from capital gains and capital acquisitions were both up 63% against a full-year forecast of 4%.

Stamp duties, up 44.9%, are forecast to fall by 1.5% while corporation tax, up over 55%, is set to grow by under 10% for the year.

This one-month outturn highlights the buoyancy in the economy yet again and strong growth for this year and next of 5% is a reasonable bet, economists said.

Looking further out Mr McQuaid sees some threat to the global economy as the US enters a period of slowdown.

Weak US growth has hit the rest of the world in the past, but Mr McQuaid is optimistic enough buoyancy already exists outside of America to deal with it.

His main concern is that the US might dip quite sharply which would put pressure on us all.

But both Asia and Europe are showing signs of growth.

Meanwhile, the emerging market economies have re-fortified following repeated crises in the 1990s and earlier this decade.

"In summary, the global economy outside the US is in its best shape in many years. Japan’s economic recovery is particularly encouraging," said Mr McQuaid.

The corporate sector’s financial health has improved dramatically in recent years. Reforms have strengthened the Japanese banking system, and these initiatives have spurred borrowing for the first time in over a decade.

Corporate sector profits as a percentage of GDP have risen to a level not seen since the 1980s, while wage growth and employment trends are also improving.

 

Economy to be €500m better off

Brian Cowen

By Brian O’Mahony, Chief Business Correspondent
ECONOMISTS are forecasting the State will be at least €500 million better off at the end of the year than Finance Minister Brian Cowen’s Budget predictions.

In a report yesterday Alan McQuaid of Bloxham Stockbrokers says the deficit for the year will be between €400m-€500m less than the forecast figure of €2,927m projected in Budget 2006.

Davy Stockbrokers’ chief economist Robbie Kelleher said the exceptional nature of the January exchequer figures were glossed over last week due to the publication of the Finance Bill.

As a result of the very good tax take in January the exchequer’s figures for this year was in surplus to the tune of €1.3 billion, compared to €419m at end January 2005.

"It is very early days yet, but the odds on a significant tax overshoot for the year as a whole already look very short indeed," he said.

The month’s figures show the tax take-up was 22% up on January 2005 against the full-year forecast of just over 6%.

Economy watchers will be familiar with revenue targets running well above target in recent years, "but, even by the standards of recent experience, the January returns were remarkable," he said.

There were no exceptional items in the figures, leading economists to conclude the current year will deliver a further significant tax overshoot for the year.

In January 2006 receipts from capital gains and capital acquisitions were both up 63% against a full-year forecast of 4%.

Stamp duties, up 44.9%, are forecast to fall by 1.5% while corporation tax, up over 55%, is set to grow by under 10% for the year.

This one-month outturn highlights the buoyancy in the economy yet again and strong growth for this year and next of 5% is a reasonable bet, economists said.

Looking further out Mr McQuaid sees some threat to the global economy as the US enters a period of slowdown.

Weak US growth has hit the rest of the world in the past, but Mr McQuaid is optimistic enough buoyancy already exists outside of America to deal with it.

His main concern is that the US might dip quite sharply which would put pressure on us all.

But both Asia and Europe are showing signs of growth.

Meanwhile, the emerging market economies have re-fortified following repeated crises in the 1990s and earlier this decade.

"In summary, the global economy outside the US is in its best shape in many years. Japan’s economic recovery is particularly encouraging," said Mr McQuaid.

The corporate sector’s financial health has improved dramatically in recent years. Reforms have strengthened the Japanese banking system, and these initiatives have spurred borrowing for the first time in over a decade.

Corporate sector profits as a percentage of GDP have risen to a level not seen since the 1980s, while wage growth and employment trends are also improving.

 

Economy to be €500m better off

Brian Cowen

By Brian O’Mahony, Chief Business Correspondent
ECONOMISTS are forecasting the State will be at least €500 million better off at the end of the year than Finance Minister Brian Cowen’s Budget predictions.

In a report yesterday Alan McQuaid of Bloxham Stockbrokers says the deficit for the year will be between €400m-€500m less than the forecast figure of €2,927m projected in Budget 2006.

Davy Stockbrokers’ chief economist Robbie Kelleher said the exceptional nature of the January exchequer figures were glossed over last week due to the publication of the Finance Bill.

As a result of the very good tax take in January the exchequer’s figures for this year was in surplus to the tune of €1.3 billion, compared to €419m at end January 2005.

"It is very early days yet, but the odds on a significant tax overshoot for the year as a whole already look very short indeed," he said.

The month’s figures show the tax take-up was 22% up on January 2005 against the full-year forecast of just over 6%.

Economy watchers will be familiar with revenue targets running well above target in recent years, "but, even by the standards of recent experience, the January returns were remarkable," he said.

There were no exceptional items in the figures, leading economists to conclude the current year will deliver a further significant tax overshoot for the year.

In January 2006 receipts from capital gains and capital acquisitions were both up 63% against a full-year forecast of 4%.

Stamp duties, up 44.9%, are forecast to fall by 1.5% while corporation tax, up over 55%, is set to grow by under 10% for the year.

This one-month outturn highlights the buoyancy in the economy yet again and strong growth for this year and next of 5% is a reasonable bet, economists said.

Looking further out Mr McQuaid sees some threat to the global economy as the US enters a period of slowdown.

Weak US growth has hit the rest of the world in the past, but Mr McQuaid is optimistic enough buoyancy already exists outside of America to deal with it.

His main concern is that the US might dip quite sharply which would put pressure on us all.

But both Asia and Europe are showing signs of growth.

Meanwhile, the emerging market economies have re-fortified following repeated crises in the 1990s and earlier this decade.

"In summary, the global economy outside the US is in its best shape in many years. Japan’s economic recovery is particularly encouraging," said Mr McQuaid.

The corporate sector’s financial health has improved dramatically in recent years. Reforms have strengthened the Japanese banking system, and these initiatives have spurred borrowing for the first time in over a decade.

Corporate sector profits as a percentage of GDP have risen to a level not seen since the 1980s, while wage growth and employment trends are also improving.