Deficit shrinks €1.8bn after solid tax-take

The budget deficit contracted to €3.5bn at the end of May compared to a €5.3bn deficit for the same period last year.

Overall, tax receipts came in ahead of target in all categories except capital gains tax, while spending came in below forecast — although there were continued overruns in the Department of Health.

“This is yet another set of solid figures, both in respect of tax receipts and spending control. Notwithstanding the cumulative effect of six years of tax increases, there is a renewed sense of consumer confidence, reflected in higher spending and resultant robust Vat returns — 4.4% ahead of this point last year,” said Peter Vale, a partner at the consultancy firm, Grant Thornton.