Ireland cuts 2021 deficit forecast to 3.1% of GDP By Reuters

© Reuters. FILE PHOTO: A general view of a crowded street while retail reopens fully as coronavirus disease (COVID-19) restrictions continue to ease after an extensive lockdown period in Dublin, Ireland, May 17, 2021. REUTERS/Clodagh Kilcoyne/File Photo

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.

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