Ireland's government must find savings in excess of the 3.0 billion euros it plans to announce in its next budget, the Central Bank said Monday as it also slashed its forecast for economic growth. The assessment comes after Ireland last week admitted that its public deficit would hit 32 percent of economic output this year - a record for a eurozone nation - as a result of massive state support for the banking sector.
Looking ahead to the annual budget in December, the Central Bank called on the government to increase its original savings target of 3.0 billion euros (4.1 billion dollars) that would come from spending cuts and higher taxation. The Central Bank also predicted in its latest quarterly report that the Irish economy would grow by just 0.2 percent this year, a major downgrade from previous guidance for a 0.8-percent expansion. "Against the background of sharply increased concerns about fiscal sustainability, the main priority in the short-term is to ensure that the 2011 budget credibly demonstrates the first step of a re-programmed tighter fiscal plan," the Central Bank said.
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