Think tank cuts growth projection for Irish economy to just 0.1%, down from 5.5% previously, while highlighting overheating risk of giveaway budget
Minister for Finance Michael McGrath: he has been told by the ESRI that there is no rationale for tax cuts in the upcoming budget. Photograph: Julien Warnand/EPAThere is “no rationale” for tax cuts in the forthcoming budget, the Economic and Social Research Institute has warned the Government.
The comments come as the ESRI slashed its growth forecast for the economy on the back of a significant slowdown in exports by the multinational-dominated pharma sector. It now expects the economy to grow by just 0.1 per cent in gross domestic product terms this year, down from a previous forecast of 5.5 per cent.
“We don’t really at this point see any clear rationale to reduce the overall tax burden in the economy,” the ESRI’s Kieran McQuinn said, noting consumer spending was still growing “quite strongly” despite the inflationary squeeze, while savings levels remained high. “You have to be careful when you are putting a lot of money into the economy in terms of investment. Given the strong performance of the economy there is a danger that you will overheat it. You’ve got to be careful where the funds go,” he said.
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