The Irish government is repeating past economic mistakes by pumping money into an already strong economy, a budget watchdog has warned.
On Tuesday, Finance Minister Jack Chambers announced a budget package of spending increases and tax cuts.
The Irish Fiscal Advisory Council said this will add to inflationary pressures and widen an underlying budget deficit.
It added that the country needs “a more serious vision that delivers on the economy’s needs without repeating the boom-to-bust pattern of its past”.
The council said the budget again breaches the government’s own rule that spending should not increase by more than 5% a year.
It calculates that spending will increase by more than 9% this year and just under 6% next year.
It said the cumulative breaches of the net spending rule since 2022 are “substantial” with total spending at least €12.5bn (£10.4bn) above what the rule would have allowed by 2025.
The criticism was anticipated by the government with the public spending minister using his budget day speech to justify the rule breaches.
Paschal Donohoe said that given the challenges of inflation and the pandemic, “the 5% anchor was simply not appropriate to cover the growth and expansion of services our country needed”.
He added: “Our strategy was the right one. We made essential adjustments to it, depending on the particular set of challenges we were facing.
“Not to do so would have meant not being able to protect and provide for our people during times of great need.”
Source link : https://www.bbc.com/news/articles/c4g5wdlnwp9o
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Publish date : 2024-10-02 06:48:33
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