The country has spent €1.1bn more than planned in the first three months of the year.
Finance Minister Paschal Donohoe has this afternoon published the Exchequer returns for the first quarter of 2020.
They show a 2.5bn deficit for January, February and March.
Tax revenue in March was €800m below expectations as the country battles the COVID-19 outbreak.
Meanwhile, expenditure is €1.1bn higher than expected – with the bulk of it going towards health and social protection.
💰 Finance Minister Paschal Donohoe has published the exchequer returns for the first 3 months of the year
💶 Tax revenue is €800 million below expectations
💶 Expenditure is €1.1 billion above expectations - much of that in health and social protection #Covid19 pic.twitter.com/cEarxlZRLR— Stephen Murphy (@Stephen_Murphy5) April 2, 2020
Announcing the figures, Minister Donohoe said tax revenues will continue to “decline steeply over the coming months.”
“On the expenditure side, the government has put in place significant resources to help fight this virus.
“Combined with the fall in tax revenues, these measures will result in a large fiscal deficit this year.
“It is entirely appropriate that the government cushions the effect of the crisis in this way.
“Thanks to appropriate budgetary policy over recent years, we meet this challenge from a position of strength – a budget surplus, cash reserves and significant progress in lowering our debt.
“Let there be no doubt that the government will continue to play its part in meeting this extraordinary challenge.”
Minister @Paschald has today outlined the End Q1 2020 Exchequer Statement which shows the first impact of the #Covid19 pandemic on the public finances. Read more: https://t.co/QouCtmcFjV pic.twitter.com/2UNySmcOVV
— Department of Finance (@IRLDeptFinance) April 2, 2020
The Exchequer deficit of €2,535m for the first three months compares to a deficit of €966m in the same period last year – a massive increase of 162%.
Meanwhile, tax receipts for the months of March more than €1bn behind target and €800m below expectations.
Receipts for the quarter as a whole are slightly up, with a strong performance in January and February compensating for the sharp drop in March.
Live register
Minister Donohoe noted that the latest live register figures, published today, show over 500,000 people are now receiving some form of State support.
“This is not unexpected, given the massive short-term disruption to economic activity that is necessary to preserve livelihoods,” he said.
“The government is making these income supports available to cushion the economic shock.
Recovery
He said officials expect the economy to “recover quite rapidly” after COVID-19 restrictions are lifted, noting that “As great as this economic challenge is, it is one that we will work our way through.”
He said he is determined to build a new economy in which, “those who are affected today can get back to work, can see their incomes grow again.”
“To build an economy that, as we are dealing with COVID-19 supports citizens at a time of need. Supports them through their income; supports them in helping to deal with costs they never thought they would have to be dealing with today.”
In total, the Exchequer has taken in €12.9bn in tax so far this year, with gross voted expenditure currently sitting at €17bn.
