The IMF has suggested that the Irish Government’s growth projections are too optimistic and should be scaled back. So has the EU Commission. This has grave implications for the Government’s current strategy; if growth doesn’t come right, fiscal targets will be missed, debt will pile up, unemployment will remain high and living standards low. The Government may well end up sinking further into deflationary quicksand.
The IMF has projected growth for Ireland up to 2014. While these projections were initially produced in the middle of last year, the IMF reconfirmed them in their recent World Economic Outlook. What would be that impact on the deficit given these growth projections? The following examines only the tax revenue side of the equation.
You can read the rest of this post on Progressive Economy.