Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Cuts of €6-€14 billion until 2025 needed to recover from Covid-19 pandemic, Fiscal Council warns

There will be ‘almost historic highs’ of debt ratios in Ireland as a result of Covid-19, the Fiscal Council’s report states.

THE FISCAL ADVISORY Council has outlined the three different scenarios in which the Covid-19 pandemic and lockdown could impact the Irish economy.

Their report, released today, notes that “adjustments of €6–€14 billion over 2023–2025″ could be required – which means cuts in government expenditure. It adds that severe fiscal adjustments “should be possible to avoid”.

“Even in the ‘Severe’ scenario, adjustments are less than half the size of those made after the financial crisis [which amounted to around €30 billion],” the report states.

Scenarios mapped out in the report suggest that we could have debt ratios ranging from 114-160% in 2021, up from 99% in 2019. This high debt will leave the Irish economy more vulnerable to future shocks, it said.

The Fiscal Advisory Council is an independent statutory body set up after the 2008/2009 financial crash to ensure oversight of government spending and public finances. 

The acting chair of the Fiscal Advisory Council Sebastian Barns told Newstalk:

We’ve done a lot of different scenarios and calculations – and our sense is that fiscal adjustment will be required, the debt ratio will be very high – almost at historic highs – and there will be a big deficit, perhaps around 3% still by 2025. 

A government deficit of at least €23 billion is now likely for 2020; in January, the government expected a surplus of €2.6 billion this year.

“The deficit should improve next year if the economy recovers and supports are scaled back as assumed. But the deficit is still projected to remain large at €13 billion in 2021,” the report said.

In a report, the Fiscal Advisory Council modelled three possible scenarios, up until 2025, for the Irish economy, with the middle scenario the most likely for Ireland to follow.

The report predicts high unemployment, where a fiscal package would be needed to support people and businesses; while also admitting that there would need to be some tax increases and spending cuts, but the scale shouldn’t be the same as in 2009.

“The next government will need to make difficult decisions about taxes and spending to achieve its objectives, while reducing debt to safer level,” the report notes.

It could take 2–3½ years to return to pre-crisis levels of activity. By contrast, the Irish economy took 11 years to recover after the 2008/09 financial crash.

Sebastian Barnes said that the recovery phase of the crisis “would warrant a sizeable fiscal stimulus”.

While some fiscal adjustment is likely to be needed in the third phase – when the economy settles on a new growth path – severe austerity can be avoided.

You can find the report here.

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

Close
65 Comments
This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
Leave a Comment
    Install the app to use these features.
    Mute art vandelay
    Favourite art vandelay
    Report
    Feb 12th 2014, 7:51 PM

    The only tip you need on Valentines day is a hard one..

    168
    Install the app to use these features.
    Mute Fionán Lynch
    Favourite Fionán Lynch
    Report
    Feb 12th 2014, 10:00 PM

    Your profile pic really makes this comment.

    73
    Install the app to use these features.
    Mute molly coddled
    Favourite molly coddled
    Report
    Feb 12th 2014, 8:29 PM

    4 tips:
    1 – same/similar sense of humour.
    2 – at least one (preferably more) common interest.
    3 – undeniable chemistry.
    4 – twinkling eyes.

    My recipe for the perfect one.
    Met mine 35 years ago.
    Married him 30 years ago, and he still has the twinkling eyes.

    120
    Install the app to use these features.
    Mute Jean Paul Valley
    Favourite Jean Paul Valley
    Report
    Feb 12th 2014, 8:48 PM

    He might want to get those checked out. Could be cataracts.

    256
    Install the app to use these features.
    Mute N O'C
    Favourite N O'C
    Report
    Feb 12th 2014, 9:17 PM

    He’s got 4 twinkling eyes???

    65
    See 5 more replies ▾
    Install the app to use these features.
    Mute molly coddled
    Favourite molly coddled
    Report
    Feb 12th 2014, 9:29 PM

    Haha only since he needed glasses N O’C ! – now I’m bewitched and bedazzled.

    37
    Install the app to use these features.
    Mute molly coddled
    Favourite molly coddled
    Report
    Feb 12th 2014, 9:31 PM

    Shhhhhhh Sean.……
    (It’s probably why he thinks I’m still beautiful !!!)

    38
    Install the app to use these features.
    Mute molly coddled
    Favourite molly coddled
    Report
    Feb 12th 2014, 9:38 PM

    Sorry not Sean….Jean, damn eyesight.

    18
    Install the app to use these features.
    Mute mary jones
    Favourite mary jones
    Report
    Feb 12th 2014, 11:05 PM

    Molly that’s beautiful. Lucky you.

    26
    Install the app to use these features.
    Mute Tammylee Murphy
    Favourite Tammylee Murphy
    Report
    Feb 13th 2014, 9:56 PM

    has he still go hair though?

    1
    Install the app to use these features.
    Mute Fergal Reid
    Favourite Fergal Reid
    Report
    Feb 12th 2014, 7:53 PM

    Season 2 of House of Cards airs on Valentine’s Day. What more do we need?

    118
    Install the app to use these features.
    Mute Tríona Barrow
    Favourite Tríona Barrow
    Report
    Feb 13th 2014, 12:39 AM

    Would stay inside all day to watch it if I could, but himself wants to watch the Lego Movie!

    20
    Install the app to use these features.
    Mute Dermot Doheny
    Favourite Dermot Doheny
    Report
    Feb 13th 2014, 6:26 AM

    Seriously good flick to be fair!

    7
    Install the app to use these features.
    Mute Drew Clarke
    Favourite Drew Clarke
    Report
    Feb 12th 2014, 8:07 PM

    Most people I know think Valentines day is a load of nonsense either way. Neither my partner or I ever do anything whatsoever to mark Valentines day. Most years it passes without us even noticing.

    68
    Install the app to use these features.
    Mute Andrew Nolan
    Favourite Andrew Nolan
    Report
    Feb 12th 2014, 10:44 PM

    Well done you’ve marked it this year by reading this article.

    33
    Install the app to use these features.
    Mute mary jones
    Favourite mary jones
    Report
    Feb 12th 2014, 11:06 PM

    I keep referring to it as Halloween! Don’t know why!

    11
    Install the app to use these features.
    Mute Cat Malogen
    Favourite Cat Malogen
    Report
    Feb 12th 2014, 8:21 PM

    Dont mix up the wife and girlfriends card after sealing :-)…or youll end up like that chillean miner a few years back…..hoping the ground will open back up again….literally

    55
    Install the app to use these features.
    Mute Name Change Test
    Favourite Name Change Test
    Report
    Feb 12th 2014, 11:39 PM

    Coppers is on Harcourt St, not Leeson St

    How am I the first person to notice this!

    29
    Install the app to use these features.
    Mute Jean Paul Valley
    Favourite Jean Paul Valley
    Report
    Feb 12th 2014, 11:58 PM

    You managed to get to the end of it?

    25
    Install the app to use these features.
    Mute Simon Eales
    Favourite Simon Eales
    Report
    Feb 13th 2014, 12:37 AM

    If you really love someone you’d make a special effort on any day of the year, not wait for a tacky, expensive, over-commercialised day dictated to you by florists, chocolatiers and greeting card companies. It’s just a profit-making scam to fill the gap between Christmas and Easter (or Paddy‘s Day here).

    25
    Install the app to use these features.
    Mute Suzanne Tully
    Favourite Suzanne Tully
    Report
    Feb 13th 2014, 2:09 AM

    Ok I’m a girl / woman ! I think (hope) ;) and I think valentines is a load of crap! Just another day that’s commercialised! But I have just won a meal for two and a bottle of wine in the local, so I will certainly be celebrating it this year!!! It’d be rude not to :)

    23
    Install the app to use these features.
    Mute Simon Eales
    Favourite Simon Eales
    Report
    Feb 13th 2014, 12:42 AM

    Anyone who throws a hissy fit because they expect a valentines card or a present from their other half frankly deserves to be single. Or shot by Al Capone.

    18
    Install the app to use these features.
    Mute Maria Hickey-Fagan
    Favourite Maria Hickey-Fagan
    Report
    Feb 12th 2014, 11:04 PM

    Valentine’s Day me hoop! I know women who would actually throw a major strop if they didn’t get a card from their other halves. What’s that all about?

    16
    Install the app to use these features.
    Mute BlueSkyThinking
    Favourite BlueSkyThinking
    Report
    Feb 13th 2014, 2:15 AM

    Sorry to be pedantic but Thai people don’t use chopsticks (fork and spoon traditionally). The first restaurant I took my wife on was a Thai as we both love SE Asian food – things seemed to have worked out.

    14
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.

Leave a commentcancel

 
JournalTv
News in 60 seconds