Budget 2027: Government to have €8.5bn available for spending and tax package

Summer Economic Statement highlights strong employment but warns geopolitical tensions and global economic uncertainty continue to pose significant risks

Tánaste Simon Harris speaks to the media outside Government Buildings ahead of a Cabinet meeting on Wednesday. Picture: David Young/PA

The Government will have €8.5bn available for Budget 2027Budget 2027, according to the summer economic statement.

The document, which outlines the broad parameters of the budget, says the Government will have €7bn in additional spending capacity in October's budget, with a further €1.5bn available for a tax package.

While no details of the tax package have been decided, the figure opens the door for personal income tax cuts, as previously indicated by Tánaiste and finance minister Simon Harris.

The statement says the near-term economy is being shaped by "two opposing forces".

While disruption in the Strait of Hormuz has triggered a "fossil fuel shock", there has been strong growth in artificial intelligence (AI), which the statement says is "working in the opposite direction".

The Irish economy, it says, is in a "healthy position", with employment at a "near-record high". Unemployment has remained below 5% for a record 54 consecutive months.

However, the statement says the global economy is in the midst of "significant structural change", citing the wars in Ukraine and Iran, as well as tariffs and the digital transition.

The document adds that risks to the public finances "remain significant".