Noonan to ignore IMF and EU and seek 3% deficit

Minister for Finance Michael Noonan has signalled that he will ignore the recommendations of the IMF and European Commission and aim for the 3% fiscal deficit target in October’s budget.

The IMF advised the Government to stick to a €2bn adjustment figure in October’s budget in its first post-bailout review of the Irish economy, released yesterday. This follows similar calls by the Irish Fiscal Advisory Council (IFAC) and the European Commission last week.

However, Mr Noonan, appearing before the Oireachtas Finance Committee, said that it was his intention to take the appropriate measures needed to reduce the deficit below 3% in the next budget. Based on current growth figures and tax receipts, this would require a budget adjustment of less than €2bn.