⁍ Ireland will this year run a narrower budget deficit than the 30 billion euro worst-case scenario it forecast early in the COVID-19 pandemic.

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⁍ The finance ministry forecast in April that state revenues would fall 16% this year due to pandemic disruption.

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⁍ But a strong start to the year, a better than expected income tax take, and a surge in corporate tax receipts meant revenues were little changed in the first six months.

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– “We’re going to be running a very, very big deficit for the year,” says Ireland’s finance minister. “It is now going to be below the 30 billion euro that we indicated.” That’s the government’s worst-case scenario when it predicted in April that state revenues would fall 16% this year due to a flu pandemic, reports Reuters. But the better-than-expected income tax take and a surge in corporate tax receipts meant revenues were little changed in the first six months of the year. “We’re going to be running a very, very big deficit for the year,” says Paschal Donohoe. “It is now going to be below the 30 billion euro that we indicated.” A deficit of 30 billion euros equated to 10% of GDP when the economy was predicted to contract by 10.5%. The finance ministry this week bumped up that forecast to a drop of 2.5%. Ireland took in 1.54 billion euros in income tax in September compared with the 1.14 billion forecast. That was still down 7.7% year-on-year, as parts of the economy remain shut due to recently tightened restrictions and a cautious reopening plan. The 2 billion euros in VAT returns last month were slightly ahead of expectations but down 14% year-on-year, while lower monthly corporate tax returns were twice what had been anticipated. Ireland’s large and less affected multinational sector has shielded the economy from the worst of the crisis. Still, the unemployment rate is set to average almost 16% this year and stay above 10% in 2021, with an unprecedented level of supports for those both in and out of work.