Irish Budget

Irish Budget: See newspaper article: At a glance: Here are the key points from Budget 2023 (RTE, 2022)

  • Current Budget Deficit: : government current revenue is less than government current expenditure  
  • Current Budget Surplus: government current revenue is greater than government current expenditure  
  • Balanced budget: government current revenue is equal to government current expenditure  

Consequences of Current Budget deficit 

  • The national debt rises as the government spends more than it takes in. This money has to be paid back with interest for the future. 
  • A deficit can cause the economy to overheat, as governments spend more money (injects more than is leaked). This causes inflation. 
  • The economy is more vulnerable to economic shocks as there is no surplus set aside in the event of such a shock in the future. 
  • Can cause higher economic growth if the government is injecting more than it withdraws. 

Consequences of Current account surplus 

  • The surplus can be used to reduce general government debt and reduce future costs of servicing debt. 
  • economic growth is lower than it would otherwise be as the government withdraws more money than it injects. 
  • A surplus can help reduce pressure on prices (inflation). It can reduce demand. 
  • surplus can be set aside for future shocks. eg. Covid 19 crisis. 
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