Irish government spending soars during coronavirus shutdown

DUBLIN (Reuters) - Irish government spending was 13.5% above its pre-coronavirus target at the end of April as a sharp rise in health and unemployment costs created a wide budget deficit, even before a shutdown of the economy is fully reflected in tax revenue.

Spending was up 23.5% or 2.4 billion euros on a year ago and 13.5% beyond what had been earmarked. A deficit of 7.5 billion euros was up sharply from a shortfall of 3.2 billion euros a year ago that had turned into a surplus by the end of 2019.

While the data from the finance department showed Ireland’s tax revenue fell 8% year-on-year in April, it said the full impact of the coronavirus pandemic has still yet to be reflected in taxation receipts.

Ireland’s tax take, which has been lifted to record levels in recent years by a fast growing economy and was up 13.8% in the first two months of 2020, is set to fall by 16% this year, according to recently revised department forecasts.

With unemployment forecast to hit 25%, Ireland laid out a roadmap on Friday for a steady reopening of the economy from the lockdown imposed to contain the coronavirus. Building sites and some retailers will be allowed to reopen in two weeks, with restaurants following in June, hotels in July and pubs in August, though all at reduced capacity.

Reporting by Padraic Halpin; Editing by Mark Heinrich