Seamus Coffey: We are spending faster than money is coming in. That leaves us vulnerable

Irish Fiscal Advisory Council chair and UCC economics lecturer Seamus Coffey raises budget concerns

Seamus Coffey is a lecturer in economics at UCC and chair of the Irish Fiscal Advisory Council.

The framing of last Tuesday’s budget is from an opening position that appears strong. There is full employment and the unemployment rate has been holding steady at 4.5%, while wage growth is once again faster than inflation. At a headline level, the public finances also seem to be in a good position. There are annual surpluses and debt ratios are declining. However, the impact of the budget and potential vulnerabilities to this opening position are evident in the figures the government set out in the budget documents.

For 2025, the government is estimating a general government surplus of €10bn. For 2026, this is projected to fall to €5bn. At a time of strong economic performance and exceptional corporation tax receipts, this reduction in the surplus is due to Government decisions. The Government is spending money faster than it is coming in.