The Government is projecting a deficit of €21.5 billion, or 6.2% for this year, in what is a dramatically transformed budgetary landscape.

Minister Paschal Donohoe acknowledged that while this is a huge figure by Irish standards, it is a similar level of deficit to what peer countries are borrowing. "What is crucial is making sure that any deficit remains a manageable deficit," he said.

One of the key budgetary objectives, the Minister said, is reducing the deficit carefully over the coming year.

"This is one of my key budgetary objectives. As such, Budget 2021 forecasts a deficit of €20.5 billion or 5.7%." He said the state's borrowing is falling, but at a proportionate and careful speed.

Minister Donohoe told the Dáil that the Government will fully utilise the €1.5 billion Rainy Day Fund, and will be bringing a resolution to Dáil Éireann this evening to bring this into effect. 

This year's deficit will bring the overall national debt levels to just under €219 billion or almost 108% cent of national income. "This is just over a €20 billion increase or approximately 10.4 percentage points on our projections in Budget 2020. However, the increase in national debt needs to be seen in the context of the significant increase in private savings over the past few months."

The Minister noted that there are limits to the overall levels of debt that are prudent to take on. 

"We know what happens when risks develop in our national finances," he said. 2We will not let that happen again."

The Department of Finance will publish an updated medium-term Budgetary Strategy as part of the Stability Programme Update next year.

The National Economic Plan, to be published next month, will also have a key role to play in mapping out our economic pathway for the coming years, and for developing economic resilience in a post-Covid world. 

The Plan will also progress the Programme for Government commitment to developing well-being indicators. A paper setting out options in this regard is being published by the Department today. 

The Department of Finance is also publishing an analysis of Budget 2021 which provides clear evidence of its progressive nature and how it protects the most vulnerable in our society.

"There remains a high level of uncertainty regarding the scale of the deficit for this year, even at this late stage," Minister Donohoe said. "This is because of the possibility of more stringent containment measures being implemented in the final quarter of the year, and the associated budgetary costs."