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.