UPDATE 1-Ireland budget deficit falls on high tax income

* Nov deficit falls to 13.3 billion euros

* Tax receipts 470 million euros ahead of target

DUBLIN, Dec 2 (BestGrowthStock) – Ireland’s swollen budget deficit
shrank slightly in November, the first month-on-month
improvement this year, thanks to strong tax income that puts it
on track to meet or even beat its fiscal goals for 2010.

Ireland’s Department of Finance said the budget deficit fell
to 13.3 billion euros ($17.54 billion) at the end of November
from 14.4 billion a month before and 22.1 billion in the same
period last year.

Ireland has targeted a 2010 borrowing requirement of 18.8
billion euros while the International Monetary Fund and European
Union have set a target for a cumulative deficit, excluding
interest payments, of 15.3 billion euros by the end of this year
as part of their agreement to provide emergency aid.

The 85-billion-euro EU/IMF loan package for Ireland agreed
on Sunday, which includes 17.5 billion from Ireland itself, is
intended to recapitalise banks which saw their balance sheets
ruined when property prices crashed, and to fund a huge
government deficit.

Tax receipts for the first 11 months of the year stood at
29.5 billion euros, 470 million euros ahead of the ministry’s
target. November is particularly important since 15 percent of
the annual tax revenue target is due for collection.

All categories of tax were ahead of target for the first 11
months of the year with the exception of income tax, the
ministry said. Corporation tax recorded a surplus of 589 million
euros, helping to offset an income tax shortfall of 356 million
euros.

Chief bond economist Oliver Mangan at AIB said the tax
income figures were particularly encouraging.

“This is the fourth month running that tax receipts have
exceeded expectations. Despite all the gloom and doom and
pressure with the IMF bailout and sharp or severe budget cuts in
store, there are signs of life in the Irish economy,” he said.

Current expenditure was 166 million euros less than planned
while capital expenditure was 851 million euros below target.

“The spending is a billion (euros) behind schedule. On this
basis we could be in store for a budget deficit that will come
in lower than expected for the year on the whole,” Mangan said.

He added GDP for the third quarter should show good growth
given the strong performance of exports in monthly trade
statistics.

The EU is giving Ireland until 2015 to get its budget
deficit below a bloc limit of 3 percent of GDP. The government
is aiming for savings of 15 billion euros over the next four
years through spending cuts and tax hikes.
(Reporting by Paul Hoskins and Yara Bayoumy; Editing by Susan
Fenton)

UPDATE 1-Ireland budget deficit falls on high tax income