Gerald Nash (Louth, Labour)
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29. To ask the Minister for Finance his views on the projected deficit figure of €23 billion to €30 billion for 2020 based on the stability programme update in April 2020 in view of recent positive corporation tax and income tax revenue receipts; the breakdown of the projected deficit figure for 2020 based on updated figures for general government expenditure and general government revenue; and if he will make a statement on the matter. [16293/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Stability Programme Update, published in April, set out a central fiscal scenario of a general government deficit of 7.4 per cent of GDP in 2020, or €23.1 billion in nominal terms. Crucially, this was based on the assumption that economic activity bottoms out in the second quarter, with gradual recovery thereafter. My Department estimated at the time that if this gradual recovery did not materialise, a deficit of the order of €30 billion (around 10 per cent of GDP) was likely.

Since April, the situation has evolved on both the tax and expenditure side. In relation to taxation revenues, consumption taxes such as VAT and excise duties have fallen significantly, as was expected. On the other hand, corporation tax receipts and, to a lesser extent, income taxes have performed better than initially thought. However, it must be acknowledged that we are only four months into this crisis and there remains a significant amount of uncertainty around the economic and fiscal situation.

On the expenditure side, the Government has continued to invest in the health service as well as support incomes and businesses through a range of measures. The scale and scope of these measures is very much in line with international norms.

Taking developments on both the tax and expenditure side into account, the fiscal deficit in 2020 is likely to be in the upper end of the range set out in the SPU.