IDEAS home Printed from https://ideas.repec.org/a/cbi/qtbart/y2026m06p2-41.html

A Concentrated Tax Base and Rising Expenditure: Fiscal Risks in Ireland's Medium-Term Outlook

Author

Listed:
  • Boyd, Laura

    (Central Bank of Ireland)

  • Conefrey, Thomas

    (Central Bank of Ireland)

  • Hickey, Ronan

    (Central Bank of Ireland)

  • Lozej, Matija

    (Central Bank of Ireland)

  • McInerney, Niall

    (Central Bank of Ireland)

  • Sauer, Radek

    (Central Bank of Ireland)

  • Walsh, Graeme

    (Central Bank of Ireland)

Abstract

The economy has grown rapidly since 2021, faces capacity constraints and is subject to significant externally driven inflationary pressures. Government fiscal policy has been procyclical in recent years with net expenditure growing at an annual average rate of 9 per cent, almost twice the estimated nominal growth potential of the domestic economy. As a result, on a real per capita basis, spending is estimated to have increased by 15 per cent between 2019 and 2025, compared to growth of 11 per cent for the euro area. With the economy operating at capacity and inflation rising, fiscal policy should avoid unnecessarily stimulating demand at present.

Suggested Citation

  • Boyd, Laura & Conefrey, Thomas & Hickey, Ronan & Lozej, Matija & McInerney, Niall & Sauer, Radek & Walsh, Graeme, 2026. "A Concentrated Tax Base and Rising Expenditure: Fiscal Risks in Ireland's Medium-Term Outlook," Quarterly Bulletin Articles, Central Bank of Ireland, pages 2-41, June.
    • Handle: RePEc:cbi:qtbart:y:2026:m:06:p:2-41
    as

    Download full text from publisher

    File URL: https://www.centralbank.ie/docs/default-source/publications/quarterly-bulletins/quarterly-bulletin-signed-articles/a-concentrated-tax-base-and-rising-expenditure-fiscal-risks-in-irelands-medium-term-outlook.pdf?sfvrsn=eda4701a_4
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cbi:qtbart:y:2026:m:06:p:2-41. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Fiona Farrelly (email available below). General contact details of provider: https://edirc.repec.org/data/cbigvie.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.