ESRI urges ‘cautious’ strategy for Budget 2018

The Economic and Social Research Institute (ESRI) has left its forecasts for Irish economic growth unchanged – at 3.8% for this year and 3.6% for 2018 – but has urged new Finance Minister Paschal Donohoe to adopt a more “cautious” stance than previously envisaged in October’s budget.

In its latest quarterly economic commentary, the think-tank said tax receipt trends this year suggest a slightly higher budget deficit in 2017 than originally forecast. It added that the unknown effects of Brexit also call for a more careful budgetary approach for next year.

“The reduction in taxation receipts from revised forecasts now suggests that the general government balance will be larger than had been expected at the start of the year. We now believe there will be a deficit in 2017 of -0.5% of GDP, compared with -0.1% in [our] previous commentary. This suggests that the budgetary strategy for 2018 needs to be more cautious than had been originally intended,” the Institute said.