Sumary of Government’s budgetary strategy risky, fiscal council warns:
- “The Government’s summer economic statement sets out a policy to expand public services, ramp up government investment and cut taxes all at the same time,” Ifac chairman Sebastian Barnes said.
- “This avoids making hard choices and leaves the public finances more vulnerable to growth shortfalls or higher interest rates.
- High public debtThe revised plan will involve €18.8 billion in additional borrowing.
- The council warned, however, that running “significant budget deficits” during a period of strong growth and with high public debt carries risks.
- the likelihood of a strong recovery and risks of inflation and overheating from persistent government borrowing;
- It suggested “a more prudent approach” would be to limit current spending to a slower pace of increase or raise taxes at the same time as the ramp-up in public investment spending.