DUBLIN (Reuters) - Ireland’s main opposition party Fianna Fail, leading in opinion polls before a Feb. 8 election, will boost annual contributions to the state’s Rainy Day Fund if elected in an attempt to further shield the treasury from potential future shocks.
Ireland’s Fine Gael-led government outlined plans for the contingency reserve in 2016 that was initially capitalized last year by transferring 1.5 billion euros ($1.7 billion) from the country’s sovereign wealth fund.
Finance Minister Paschal Donohoe plans to supplement it with 500 million euros a year until it reaches a total of 8 billion euros, although he postponed the first contribution last year to instead set money aside for a possible chaotic Brexit.
Fianna Fail’s finance spokesman Michael McGrath said he would increase the annual deposits to 750 million euros to reach a total of 5.5 billion euros by the end of the next government’s term in 2025, while continuing to grow a budget surplus in line with the finance department’s projections.
“We will still run the same surplus on the government balance side, your net debt position remains unchanged but I think it will be an important reassurance for investors, those who buy government bonds to see that Ireland has very much learned its less and is putting money aside,” McGrath told a news conference on Wednesday.
The Irish economy is forecast to grow by an average of 3% per year to 2025 but finance ministry officials assess risks to those estimates to be “highly skewed to the downside”, pointing to Brexit, a possible deeper global downturn and disruption to global trade.
Ireland’s finances returned to a small surplus for the first time in a decade in 2018 and is projected to rise to 1% of gross domestic product (GDP) by next year.
Reporting by Padraic Halpin; Editing by Pravin Char