The exchequer surplus will be at least £1.5 billion less than forecast in last year’s budget, one of the largest shortfalls ever recorded according to the Department of Finance.
In its exchequer statement for the end of September published today the Department said the surplus for the first three quarters of the year was £2.3 billion compared to £2.9 billion in 2000.
The main cause of the shortfall is a steep drop in tax revenue which is only up by 2.2 per cent on the year compared to a budget day forecast of 12.5 per cent.
A breakdown of the main tax classes shows that additional income tax revenue of 3.6 per cent is less than half that forecast in the budget. Similarly VAT returns have increased by only 6.7 per cent compared to a forecast of 17.7 per cent.
Department officials warned today that the shortfall may be even larger for the full year as the prospects for the economy look increasingly uncertain over the coming months.
Commenting on the figures today the Minister for Finance Mr McCreevy said that the accelerating weakness in tax receipts, underlines the necessity for "a prudent approach to the public finances particularly over the coming months."
Mr McCreevy added "We will all have to adapt our expectations in the short term in order to ensure continued strong growth over the medium term which will benefit all sectors of society."