In the previous year, there was a modest reduction in budget surplus which came down to €8.3 billion, or 1.7 per cent of gross domestic product (GDP), from its record level of €8.6 billion in 2022. This data was reported by the Central Statistics Office (CSO).
State revenue in total mounted to €123.7 billion, marking an increase of €7.8 billion from 2022. The total expenditure of the Government was also on the rise, registering €115.4 billion, which is €8.1 billion above the preceding year. The gross general Government debt witnessed a decline, dropping to €220.7 billion.
The revenue from taxes observed a boost of €4.7 billion (5.2 per cent) compared to the year before, with expansion noted in both direct and indirect taxes. Direct taxes, which envelop corporate tax, registered a year-on-year boost of €3.3 billion (5.7 per cent). Indirect taxes also demonstrated an increase of €1.4 billion (4.4 per cent) in 2023.
Correspondingly, the total expenditure for 2023 was €115.4 billion, marking an increase of €8.1 billion (7.5 per cent) from 2022. A surge in expenses was detected in most expenditure categories, which reflected the consistent inflationary tensions in 2023.
The increments were dominated by a €2.3 billion (8.1 per cent) surge in employee compensation, a €1.4 billion (8.1 per cent) hike in the usage of goods and services, and a surge of €1.3 billion (12.3 per cent) in gross fixed capital development.
Cash-based social benefits increased by €1.7 billion (5.9 per cent), while the boost in social benefits in kind of €1.2 billion (13.3 per cent) included support for refugees from Ukraine.
The expenditure on incentives continued to shrink, decreasing by €0.9 billion (25.5 per cent) with the termination of Covid-19 related schemes in 2022.
The gross debt to GDP ratio for the general government was down to 43.7 per cent at the close of 2023, in comparison to 44.4 per cent of GDP in the previous year. The year-on-year nominal value of debt decreased by €4.1 billion.
Finance Minister Michael McGrath has highlighted the “considerable fiscal surplus” in 2023 for the second consecutive year, stating that it “provides us with alternatives not freely accessible to numerous equivalent countries in the developed sphere”. He acknowledged the importance of recognising that a portion of the surplus is attributable to robust corporate tax earnings, a section of which may turn out to be unanticipated bonuses.
“Regardless of our robust headline position, these can easily fluctuate due to the intrinsic instability in our corporate tax earnings and our reliance on income from a limited array of multinational corporations,” he noted.
“It’s absolutely crucial, in this regard, that fleeting income sources are not deployed to fund permanent expenditure increments or tax deductions,” he cautioned.