DAVY VIEW

Today’s exchequer returns show a €2bn hit from COVID-19 on the public finances in March through extra health spending and social welfare payments and a fall in VAT receipts. The 50% reduction in VAT reflects the decision to allow companies to defer tax payments rather than illustrating a decline in retail spending. At his press conference, Minister for Finance Paschal Donohoe indicated that the government deficit could well exceed €8bn (2.3% of GDP) this year.