"The Central Bank warned last week that we cannot continue state spending at the current rate without raising taxes or cutting back on current expenditure. The regulator starkly spelled out that the upcoming budget's €9.4bn package for next year involved "too much spending". Of course, there was a certain degree of gobble­degook, as befits all such bulletins, such as: we could be left vulnerable to "geo-economic fragmentation"."
"The watchdogs are barking in unison, for the Economic and Social Research Institute (ESRI) has warned that wages in the construction sector are outstripping those in the rest of the economy at a time when we are trying to reduce the cost of housing and ramp up supply. The think-tank notes that the economy is operating close to or at full capacity and extra spending could have damaging effects. It also warned that the cornucopia from the multinationals could "vanish quickly"."
The Central Bank warned that state spending cannot continue at current rates without raising taxes or cutting current expenditure. The regulator said next year’s €9.4bn budget package involves too much spending and signalled vulnerability to geo-economic fragmentation. Reliance on finite multinational corporation tax windfalls risks a sudden fall in receipts. Economic indicators show the economy is near full capacity, and paying to push wages could fuel inflation. Wages in construction are rising faster than the rest of the economy, undermining efforts to reduce housing costs. The ESRI warns extra spending could be damaging and that multinational revenue gains could vanish quickly.
Read at Irish Independent
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