DUBLIN (Reuters) – Ireland on Saturday cut its budget deficit forecast for the year to 3.1% of gross domestic product from a forecast it made three months ago of 5.1% thanks to lower-than-expected spending and strong tax receipts and economic growth.
The government had indicated in recent weeks that it expected to cut its deficit forecast after the state collected 5.8% more tax than expected during the first nine months of the year while spending 3.2% less than forecast.
The deficit will be around 5.9% of modified gross national income (GNI*), which the government sees as a better reflection of the real economy as it strips out distortions caused by the country’s large multinational sector, a government pre-budget paper published on Saturday said.
That was down from an earlier forecast of 9.4% of GNI*.
The government is due to publish its annual budget on Tuesday.