Saturday, 4 December 2010

Irish deficit hits 32 percent of GDP

It is not news, I know. However,the Irish government has published its pre budget white paper. Although the 32 percent of GDP deficit number has been around for a month or so, it is still shocking to see the sorry story of Ireland's collapse in a few cold data tables.

This year, the Irish government expects to collect €36 billion and spend €54 billion, leaving a deficit of around €18 billion. The banking sector clean up added a further €32 billion to the deficit. That is around €7,100 euros per person.  The combined effect of a large deficit and a massive financial sector clean up added  €50 billion.  That is equivalent to one year of government expenditure.

This isn't the whole cost of the clean up.  There were a few earlier cash injections into the banks that the Irish taxpayer will have to cover. However, I don't have those numbers with me. Nevertheless, we can all feel suffiicently enraged by the  €7,100 figure that was accumulated just this year.

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