DAVY VIEW

Ireland’s public finances remain strong this year. Buoyant tax revenues suggest an acceleration of economic growth in Q2. Excluding corporation tax, core tax receipts grew 7.5% year-on-year (yoy) (7% in Q1). Volatile corporation tax outperformed official projections, boosting the Exchequer cash balance to €27.6bn. However, public spending is also rising. While social protection was flat yoy in Q2, health spending grew by 8%, education by 15% and other non-interest current spending by 5.5%. Capital spending was up 55% yoy in Q2 or 14% above the Budget 2024 profile, mainly as a result of spending on housing.