The Department of Finance has raised its economic growth forecasts for this year in a pre-Budget outlook published this afternoon, mainly because of stronger than anticipated consumer spending.
The department now believes gross domestic product will expand by 5.25%, with gross national product increasing by 5.75%. In last December's Budget, the forecasts were 4.6% and 4.8% respectively. The department says both measures should grow by 5% a year in the period to 2008.
The report estimates that there will be an Exchequer deficit of just €626m this year, compared with a €2.9 billion deficit expected last December. The improvement is mainly down to €2.2 billion extra in tax receipts, boosted by a better than expected take from stamp duty and capital gains tax.
The Minister also ruled out any changes in Stamp Duty in Budget 2007.
The report also says the average rate of inflation could be 4% this year.
The outlook was published as part of a change in the Budget process announced last year by Finance Minister Brian Cowen. The Minister welcomed the positive outlook for the economy, despite risks from lower international growth and variable oil prices.
