Finance Minister Brian Cowen faces hard decisions on public expenditure. Exchequer returns for the first seven months of 2007 show a deficit of €1.33 billion. Stamp Duties were €173 million lower than expected while the figure for capital gains taxes was €110 million. This provides solid evidence of a slow down in the property market. The ECB has hinted at a further rise in Euro-zone interest rates in September.
"The latest Exchequer figures show that current spending has been growing far more rapidly than the growth in tax revenue. The surplus of €1.217 million at this time last year has been turned into a deficit of €1,334 million," Fine Gael Deputy Leader & Finance Spokesman Richard Bruton TD has said.
"This situation is simply not sustainable. It reveals worrying trends in both Capital Gains Tax and Stamp Duty, which are both almost 10% below expectations for this time of the year. Clearly if this pattern continues the end of year deficit will be substantially worse than that forecast by the Government."