The Exchequer has posted a deficit of over €638 million in the first four months of the year according to figures released today by the Department of Finance.
This compares to a surplus of €496 million for the same period last year.
Total receipts were up almost €0.8 billion to €15,172 million compared to €14,334 million for the same period last year.
However, the figures show that total expenditure from January 1st until April 30th also rose by nearly €1 billion from €13,837 million to €15,810 million respectively when compared to last years figures.
Alan McQuaid, chief economist at Bloxham stockbrokers, said April's fall into the red had more to do with expenditure than any deterioration in the rate of growth in tax revenue.
"Despite the lower than expected income tax receipts in the early part of 2007, we don't think this reflects a weakening economy," he said in a research note, pointing out that tax revenue was still some 10.8 per cent higher than a year ago.
"Overall strong economic growth should again bolster the coffers of the exchequer, with tax revenue likely to be well ahead of expectations," Mr McQuaid added, forecasting a positive budget balance of around €1 billion by year end.
All of Ireland's main political parties have promised higher spending and lower taxes, combined with fiscal prudence, if they win elections later this month.