AIB economist predicts sensible pre-election budget

AIB's chief economist has predicted that the Government will not engage in reckless spending in its final budget before the next election.

Opposition parties claim the Minister for Finance Brian Cowen may be preparing a giveaway budget in an effort to buy the election for Fianna Fáil.

However, AIB's John Beggs says he believes the only major spending increases will be in health and education, with a widening of the tax bands to take account of inflation.

He says the Government is aware that a slowdown in economic growth could be just around the corner and will not be taking any risks by significantly increasing public spending.

In his latest economic forecast, Mr Beggs predicts that the economy will continue to perform well for the next year or more, but growth will slow after 2007, particularly due to weaker consumer spending.