Irish consumers are spending in force and their efforts have been contributing nicely to the State's already-healthy coffers.

The latest Exchequer figures from the Department of Finance are so strong on the consumer side that even cautious department officials were yesterday forced to acknowledge "a strong pick-up in personal consumption".

This strong pick-up amounted to €139 million in unexpected VAT receipts, which were 4 per cent higher than the Department of Finance had been predicting.

Cars were just one factor in the overshoot, the officials said. Sales of other goods and services have, it seems, also been booming.

Close to the top of the list here is the old reliable - property. As well as making a hefty contribution to the VAT outperformance, property sales also saw stamp duty come in €38 million ahead of official expectations in the first quarter. Other areas of tax also delivered ahead of forecasts, with customs receipts and corporation tax both outperforming by €12 million.

Philip Hamell, head of the Department of Finance's finance directorate, acknowledged that the tax picture - an overall overshoot of €221 million - seemed healthy.

Mr Hamell was at pains however to emphasise the "mixed picture" that had been created over the first three months of the year when all taxes are considered.

He pointed to excise receipts, which came in €3 million below the Department's forecasts, mainly due to lower spending on cigarettes. Capital gains taxes were, meanwhile, €45 million behind the expected level for the end of the third quarter.

More striking again was a €12 million undershoot in income taxes. While small in the overall context of income taxes, which amounted to €2.3 billion in the first quarter, the performance is nonetheless noteworthy. At a time of full employment, it might be expected that income taxes would be overshooting to the same extent as other taxes that are inherently linked to the consumer. The reason for the differential is at this stage unclear.

Also hazy at this early point is the likely Exchequer impact of the Government's decision to refund charges illegally levied on patients in long-term public care between 1976 and 2004. Some estimates suggest that a bill of €2 billion could be looming.

As for other expenditure, Mr Hamell said the €438 million left unspent by Government departments at the end of March would be used up by the end of 2005.

Cynics have, however, been recalling previous end-year Exchequer outcomes, noting that they have recently been consistently better than early forecasts might have suggested.

In this camp last night was Alan McQuaid, chief economist of Bloxham Stockbrokers. He believes that the State borrowing bill this year could now be nearly €1.2 billion less than official expectations, at €1.8 billion.