On 7 December, Finance Minister Brian Lenihan proposed an austere budget for 2011, only ten days after the joint EU-IMF bailout plan was laid out in an effort to help stabilise Irish macroeconomic system. The new budget includes massive spending cuts that aim to achieve EUR 15 billion of savings and to cut the fiscal deficit to below 3% of GDP by 2014. The budget is based primarily on spending cuts, as no major tax hikes were introduced. The top rate of income tax will remain at 52%. However, the government lowered the income tax bands and credits, which will increase the tax take. The corporation tax will remain at 12.5% despite opposition from some countries of the EU, which consider the low tax as unfair competition. The majority of austerity measures will involve expenditure cuts in social welfare and health benefits, which will be reduced by 4% on average. While the salaries of public sector workers have been spared from cuts, it was agreed that the earnings of members of parliament will be trimmed and a new salary cap will be introduced. The measures taken by Ireland's government to curb the high fiscal deficit have only soothed nervous investors temporarily, as the interest rate on Irish 10-year government bonds rose, pushing up the yield spread between Irish and German bonds to -.-% on 22 December. The government aims to reduce the budget deficit to between 9.25% and 9.5% of GDP in 2011.
Irish government approves 2011 Budget
December 7, 2010
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Ireland Economic News
October 11, 2016
Industrial production contracted 13.4% from the previous month in seasonally-adjusted terms in August, contrasting the revised 7.9% expansion in July (previously reported: +3.7% month-on-month).
October 10, 2016
In September, the KBC Bank Ireland/ESRI Consumer Sentiment Index dropped from 102.7 points in August to 102.0 points.
October 6, 2016
The Investec Services Purchasing Managers’ Index (PMI) nosedived from 59.7 in August to 56.2 in September, the lowest reading since February 2014.
October 3, 2016
The Investec Manufacturing Purchasing Managers’ Index (PMI) edged down from 51.7 in August to 51.3 in September.
September 21, 2016
The Irish national accounts data continues to be affected by distortions and volatility.