Budgetary watchdog, the Fiscal Advisory Council, has said strong corporation tax receipts should "not be relied on to fund permanent spending increases".

The council made its comments in a series of tweets last night in response to the Summer Economic Statement published by the Government yesterday.

The Government's Summer Economic Statement confirmed its plans to unveil €6.7 billion in new spending and tax measures on Budget day, brought forward to 27 September.

Bumper corporation tax receipts have improved the outlook for the public finances and the Government is now predicting a surplus of approximately €2 billion this year and around the same amount next year.

Without those corporation receipts, the deficit this year could be in the region of €7 billion, according to Government figures.

The Summer Economic Statement itself refers to "a clear vulnerability for the public finances" from the "concentration risk" of ten multinational firms now paying half of all corporation tax and one in every €8 collected in tax.

The Fiscal Council said these corporation tax receipts "should not be relied on to fund permanent spending increases" but should be put in a new Rainy Day Fund.

It warned that uncertainty about the economy remains very high and there are substantial downside risks to growth.

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But it described as "sensible" to allow some leeway to move away from the 5% spending rule when inflation is so high.

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Sebastian Barnes, chair of the Fiscal Advisory Council, said that there is a global risk of recession but Ireland is in a relatively good place due to its reliance on digital and farming, and lack of reliance on Russian energy.

Mr Barnes said the Government was right to bring the spending cap up to 6.5% in the summer economic statement, but noted that the increase is still less than the inflation rates.

He said that the Government found themselves in a difficult situation, and that for the general public, increases in energy prices and raw materials are dragging down living standards with some people much harder hit than others.

The chair of the Fiscal Advisory Council said the Government should be helping the most vulnerable and have the space to do that, but the current situation does leave the country as the whole worse off.

He said that the 5% cap on spending was a good idea but it now is not viable, but the general aims to have the growth of spending in line with growth of the tax rate for a steady economic ship.

Mr Barnes added that there is a global risk of recession, and that central banks could take even stronger action that what we have seen so far.

He said that there are many reasons the economy could slow down, but Ireland is relatively less at risk as it less reliant on Russia, and that digital trends and farming are benefiting from trend improvements and demand.

But if the world economy slows there will be an impact as Ireland will not be immune from that, he added.