merrion street

Figures released by the CSO today show that the underlying General Government Deficit in 2015 was 1.3% of GDP. This is well within the 2.9% limit which had been set by the European Council in its recommendation to Ireland in December 2010.

The headline General Government Deficit for 2015 stood at 2.3%. This was almost 1% higher than expected due to a decision by Eurostat on the classification of a one-off transaction. Eurostat classified the conversion of preference shares in AIB to ordinary shares as General Government Expenditure.

This performance together with the forecast reduction in the deficit in 2016 to 1.1% of GDP means that Ireland should exit the Excessive Deficit Procedure as expected. The outturn data and future forecasts demonstrate that the excessive deficit has been corrected in a durable manner. 

Commenting on the publication by the CSO of the EDP Return for 2015, Finance Minister Michael Noonan said:

The underlying General Government Deficit of 1.3% of GDP and the reduction in the debt to GDP ratio to under 94% demonstrates strongly the continued improvement in Ireland’s public finances.

Indeed, the strength of the performance is such that impact of the treatment of the AIB preference share transaction by Eurostat leaves the headline deficit at 2.3%. This is still well within the EDP limit of 2.9% that Ireland had to achieve last year.  The one-off nature of the transaction affecting the 2015 figures has no further implications and my Department is forecasting a deficit of 1.1% of GDP for 2016.