Market comment

Minister for Finance indicates fiscal position better than expected

DAVY VIEW

Minister for Finance Paschal Donohoe used the political space created by fear of a ‘no-deal’ Brexit to implement his conservative October Budget, predicated on a hard Brexit and a €2bn deficit (0.6% of GDP) in 2020. However, yesterday (November 12th) he admitted that Brexit risks had dissipated and a surplus of 0.5% of GDP was likely. Further, better-than-expected corporate tax receipts in November meant that the fiscal position would beat the €670m surplus (0.2% of GDP) expected for 2019. This suggests there are upside risks to our forecast for a €1.2bn surplus in 2019 and €2bn surplus in 2020.

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Nov 13 2019, 07:40 GMT

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