The economy has recovered strongly but it's a "little early to describe it as a boom", the Finance Minister has said.
Paschal Donohoe was speaking after figures released earlier this week indicated the economy will continue to grow strongly in the coming years.
The Central Bank said the economy looks set to grow by just over 7% this year, over 5% next year and just under 5% in 2024.
However, there's concern over inflation, which is currently at a 21-year high.
Minister Donohoe told The Pat Kenny Show the economy is in a good place after two difficult years.
He said: “We’re in the early phase of a really strong recovery for the Irish economy, after the huge challenge, anxiety and trauma that the darkest days of the pandemic have caused us.
“It’s a little early to describe it as a boom.
"At this point, what we can say is we have been successful in putting together the supports that have helped our economy recovery to this point… due to the efforts and stamina of our country and all who work in our economy.”
He noted that the country's debt will have increased by €32bn due to pandemic-related borrowing, with the Employment Wage Subsidy Scheme alone accounting for €9-10bn of that.
However, the minister argued the scheme has played a “vital role” in keeping businesses viable during closures and extended periods of restrictions.
"It's a little early to describe it as a boom." Minister for Finance, Paschal Donohoe, joins @PatKennyNT to discuss Ireland's economic outlook as we begin to emerge form the Covid pandemic. pic.twitter.com/e9pcnnku33
— NewstalkFM (@NewstalkFM) January 27, 2022
Minister Donohoe said there are already signs that higher-than-expected levels of tax revenue will help avoid any further borrowing.
He said: “Our economy is now going to begin to grow at a faster pace than our debt will grow.”
There's been criticism this week that the Government isn't doing enough to address the rising cost of living.
Opposition parties claim the €100 euro energy bill credit won't be enough to ease the burden on consumers.
Minister Donohoe said that measure alone will cost €210m, and suggested a number of changes already announced in the budget will also help with the situation.
He said those include measures around personal tax credits and social welfare payments, as well as commitments around the "affordability of medical care".
He said he's "confident" that there'll be continued changes, "budget by budget", to help those under financial pressure.
Tax warehousing
Many SMEs in Ireland have been availing of Revenue’s Debt Warehousing scheme, which was put in place to support businesses during the easing of restrictions.
Under the scheme, businesses have been able to “warehouse” their VAT and PAYE (Employer) liabilities and any wage subsidy overpayments.
Minister Donohoe said the warehousing of tax debt will be available to the most impacted taxpayers for a “few more months” - until April 30th.
He said: “For a 12 month period after that… you will be able to warehouse your tax liability still at a zero interest rate. After that, the interest rate will move to 3%.
“Revenue will then agree - taxpayer by taxpayer - an appropriate tax payment and settlement plan that will, of course, reflect the circumstances of each company."
However, the Finance Minister said there'll be no tax write-off or amnesty for businesses once those arrangements end.
He said: "There are many, many taxpayers who have just gone through an appallingly difficult period who kept paying their tax - particularly those that were self-employed.
"What would I say to all of them, if I said to a particular set of employers ‘you don’t have to pay your tax in the future’?
“You will have to pay the tax liabilities that are warehoused, but we’re doing that over the longest period we think is appropriate.”
