Lenihan admits further slashing of day-to-day expenditure

FINANCE Minister Brian Lenihan has admitted the Government will have to slash day-to-day spending next year to an even greater extent because the economic contraction will be much worse than they thought.

Just two months ago, Mr Lenihan predicted in the budget that the economy would contract by 1% next year. But he is now predicting it could contract by as much as 4%.

“All the indications are that economic activity in 2009 will contract by significantly more than the forecast in the recent budget, with an overall contraction of perhaps somewhere in the region of 3% to 4%,” Mr Lenihan told the Dáil.