The Summer Economic Statement confirms to us that the government is targeting a deficit of 0.1 per cent of GDP for 2019. This target will accommodate a budgetary package of €3.4 billion, of which €2.6 billion has been pre-committed to expenditure measures leaving €800 million for further allocation in Budget 2019. The Statement tells us that the government’s prudent approach to its Budgetary Strategy will “facilitate the building-up of buffers for when times are less favourable and one that will help mitigate against potential future shocks”.

The Summer Economic Statement sets out the key elements of the Government’s budgetary strategy which revolves around five key areas:

• Ensuring steady and sustainable improvements in living standards;
• Rebuilding fiscal capacity
• The need for prioritisation and realism
• The need to avoid pro-cyclical fiscal policies
• That budgetary policy will focus on ensuring fiscal sustainability

The Budgetary Strategy (Chapter 3, page 13) is framed “on the basis of what is right for the economy in order to ensure continued, steady improvements in Irish employment and living standards”. Eliminating budget deficits, reducing debt, developing a “fiscal cushion” and creating the “Rainy Day Fund” are all budgetary priorities of government.

You can read the Summer Economic Statement on the Department of Finance website.