Before considering the challenges that lie ahead, it is worth reflecting on some of the known risks facing us today. The public finances have improved quickly following the pandemic with a surplus expected this year. This is notable progress given a deficit of almost 9 per cent of national income (GNI*) was registered in 2020 but important weaknesses remain.
In terms of government revenue, having increased threefold between 2014 and 2021, corporation tax receipts have continued to grow rapidly and surpass expectations. Research by Central Bank staff suggests that € – or more than half of last year’s receipts – cannot be explained by developments in the underlying economy and therefore could be considered as potentially unsustainable.