The improving health of the economy is reflected in the latest official figures, which show that tax revenue in the first three months of the year is better than expected, while spending is lower than forecast.

The exchequer returns published yesterday show tax revenue of €9.23 billion, which is €415 million, or 4.7 per cent, up on the same period last year, and €257 million, or 2.9 per cent, higher than forecast.

Income tax, which is the biggest tax heading, generated €3.795 billion, which was 3.5 per cent up on the same period last year and marginally higher than forecast.

The higher income tax receipts reflected the increase in employment over the past few months, according to Department of Finance officials.

Improved retail sales are reflected in the VAT intake of €3.51 billion, which was €210 million, or 6.4 per cent up on the year and 1.6 per cent ahead of forecast.

Excise was €1.1 billion, which was 11.5 per cent up on the year and 11.2 per cent higher than forecast.

Car sales
Officials said this was a reflection of higher than expected car sales in the first three months of the year.

On the spending side, total net voted expenditure of €10.26 billion was €631 million, or 5.8 per cent, down on the same period last year and €261 million less than forecast.

Current health spending at €3.2 billion was €49 million over target, but this represented an overshoot of just 1.5 per cent.

Social welfare spending of €3 billion was €441 million, or 12.8 per cent, lower than the first three months of last year and €156 million, or almost 5 per cent, less than forecast.

A total exchequer deficit of €2.3 billion was recorded for the period, which represented an improvement of €1.4 billion on last year.

The figures were welcomed by Minister for Finance Michael Noonan and Minister for Public Expenditure and Reform Brendan Howlin, who said it represented a solid start to the year. Mr Howlin warned, however, that it was early in the year and there was a need to keep spending in line.