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.

File photo Shutterstock/Pommer Irina

Taoiseach pledges tax cuts despite ESRI saying there is 'no rationale' following summer report

Inflation is expected to come down while tax revenue is due to rise, the ESRI said.

LAST UPDATE | 29 Jun 2023

TAOISEACH LEO VARADKAR has confirmed that the government intends to make “tax cuts” in the next budget despite comments from the Economic and Social Research Institute (ESRI), reported this morning, arguing that there is “no rationale” for them. 

“There will be tax cuts in the forthcoming budget, as there has been the last couple of budgets,” Varadkar told reporter in Brussels today while attending a meeting of the EU Council.

Varadkar’s comments come on the day the ESRI released their quarterly report on the Irish economy, which stated among other things that tax revenue had risen this year and would continue to do so next year. 

In general, according to the report, Ireland is expected to experience continued economic growth for the rest of this year and into 2024, according to the ESRI, with domestic economic activity forecast to remain “strong” while multinational activity is predicted to slow down. 

“Our forecast for Modified Domestic Demand (MDD), the more accurate measure of domestic economic activity, is for growth of 3.6% this year and 4% in 2024,” the ESRI said in a statement accompanying its quarterly report. 

Inflation is expected to come down while tax revenue is due to rise, the ESRI said.

“We continue to forecast a significant moderation in the inflation rate as price pressures begin to ease, particularly in the energy market,” the economic think tank stated.

“Lower inflation, coupled with some unwinding of high savings from the pandemic, is likely to boost consumption,” it predicted.

The Irish labour market “continues to operate near full capacity” with unemployment standing at 3.8% as of May this year. The ESRI predicts that this will remain below 4% this year and in 2024.

This tracks with the quarterly report released by the Central Bank last week.  

Tax revenue is showing signs of continued growth, with a 10% rise in receipts in the first five months of this year compared to the same period in 2022, according to the report. 

“We anticipate a significant surplus in the government balance in 2023 and 2024, some of which will be added to the National Reserve Fund.”

Higher interest rates and reduced global demand for exports are contributing to “some moderation in investment activity and a cooling impact in housing and mortgage demand,” the ESRI said.

“Reduced global demand is also feeding through to export activity. Growth in exports is now expected to increase at a reduced pace, largely due to declines in pharma-related goods,” it said.

The ESRI also warned that any continued contraction in the pharma and tech sectors could lead to “downward revisions in export growth and lower the growth outlook.”

Additionally, price increases based on higher wages may lead to “persistently high inflation and labour-related constraints in sectors such as construction may dampen housing output.”

One of the report’s authors, associate research professor Conor O’Toole, said: “The domestic economy is continuing to grow robustly and the labour market is particularly buoyant.”

“This is likely to lead to challenges in sectors such as construction and risks exerting upward pressure on general prices and wages,” he said.

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
45 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 and the hit's just keep coming
    Favourite and the hit's just keep coming
    Report
    Jun 18th 2024, 10:26 AM

    So sad i grew up with so many fond memories of the music he produced….it was played in every club in the city for a decade… thanks for the 90s ….RIP

    138
    Install the app to use these features.
    Mute The Firestarter
    Favourite The Firestarter
    Report
    Jun 18th 2024, 10:57 AM

    So sad, another one gone way too early thanks to this awful disease. RIP Paul, and thanks for the memories

    84
    Install the app to use these features.
    Mute Stiofán Namara
    Favourite Stiofán Namara
    Report
    Jun 18th 2024, 11:14 AM

    By all accounts he was a very decent guy all round. ‘Voices’ by Dario G is one of my ‘go to’ uplifting songs. Always come back to it. RIP

    69
    Install the app to use these features.
    Mute Pat Maher
    Favourite Pat Maher
    Report
    Jun 18th 2024, 2:48 PM

    Sad, far too young, an awful bloody disease. Leaves a wonderful legacy, but would be better if he was still here to create. RIP

    26
    Install the app to use these features.
    Mute Modern Irish Dad
    Favourite Modern Irish Dad
    Report
    Jun 18th 2024, 3:20 PM

    https://youtu.be/dLB56lFYlBI?si=UrWBZhDNQoUXOrKk They should belt this one out at the euros tonight

    10
    Install the app to use these features.
    Mute Alex Marquis
    Favourite Alex Marquis
    Report
    Jun 18th 2024, 6:03 PM

    Heard he was a Crewe Alexandra fan and chose his scene name after Dario Gradi. RIP. Sunchyme (cover of Life in a Northern Town) such a catchy tune.

    9
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