The Exchequer posted a budget deficit of €1,142m in the opening month of 2014 compared with an overall budget surplus of €704m in January 2013. <p>

Tax revenues in the first month of the year totalled €3,130m, a decrease of €644m on January last year. The Government is targeting an overall increase in tax receipts this year of 5.9%. However, the January figures were negatively impacted by the introduction of the Single Euro Payments Area (SEPA) system. Excluding, the SEPA effect, underlying tax receipts were up by about 5% year-on-year. <p>

As regards government spending, net voted expenditure was 3.8% higher in the year at €4,134m. Meanwhile, debt servicing costs were down 35% on January 2013 at €368m. <p>

The Government is aiming for an Exchequer deficit of €9,595m in 2014, down from €11,497m in 2013. The General Government Deficit has been targeted at 4.8% of GDP this year, down from the estimated figure of just over 7.0% of GDP in 2013. <p>

<B>It is very hard to read too much into the Exchequer figures for January and we will need a few more months’ data before we get a clearer picture as to where the public finances are going this year. Still, assuming no major external shocks which would hit Irish GDP growth projections for 2014, we remain confident that at the very least the official 4.8% budget deficit target will be achieved if not bettered.
<p><h5>Alan McQuaid</h5>


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