Irish economy watch: Budget deficit 'at least 10%' this year

Ireland's budget deficit will be "at least" 10% of the modified and more accurate measure of annual output, equivalent to at least €20bn, according to Dermot O'Leary at broker Goodbody.

S&P Global Ratings said the hit to the world economy from the Covid-19 crisis will be "longer and more intense than thought". File picture.

Ireland’’s budget deficit will be "at least" 10% of the modified and more accurate measure of annual output, equivalent to at least €20bn, according to Dermot O’Leary at the broker Goodbody.

The chief economist said that he hadn’t formally set his budget deficit estimates but that "using a more appropriate gauge of activity of GNI*, the deficit will, in reality, be above 10% while debt will rise to above 100% once again" when the costs of the Covid-19 crisis are all accounted for.

The IMF earlier this week forecast much lower deficits and gross debt for Ireland as percentages of GDP -- a measure that overstates the size of the Irish economy by about a third because of the activities of the multinationals.

"Ireland will also experience a very large due to Ireland’s unique issues with GDP as a comparator," Mr O’’Leary said.

Ireland posted an annual budget of deficit of 11.6% of GDP, excluding bank costs, in 2009.

Meanwhile, S&P Global Ratings said the hit to the world economy from the Covid-19 crisis will be "longer and more intense than thought".