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Ireland to boost budget package to fight inflation - minister

·1 min read

DUBLIN, July 4 (Reuters) - Ireland's cabinet is set to agree to significantly increase its budget package for 2023 to 6.7 billion euros ($7 billion) from the 4.5 billion euros previously available to help offset some of the effects of soaring inflation, a junior minister said.

Ireland introduced a new expenditure rule last year seeking to tie government expenditure growth to the nominal growth rate of the economy that added up to the 4.5 billion euro package, 3 billion euros of which is needed just to meet existing levels of service, investment plans and demographic costs.

However, the treasury has taken in 27% or 6.4 billion euros more tax this year than in the same period of 2021 while Irish inflation hit a new almost 40-year high of 9.6% in June.

"It (the stronger fiscal position) will enable somewhere in the region of 6.7 billion euros for budget 2023," Junior Trade Minister Robert Troy told national broadcaster RTE on Monday ahead of a cabinet meeting to finalise the package.

The increase means the government will suspend its expenditure rule for at least next year. Public Expenditure Minister Michael McGrath told Reuters last month that his officials were examining such a move.

The cabinet will also consider bringing the budget forward to September from the usual date of mid-October so some measures can be introduced more quickly to help people with higher energy bills in particular.

Ministers have said the budget could also include reductions in childcare and university costs, an extension of temporary cheaper public transport fees, a range of welfare increases for poorer households and income tax cuts.

($1 = 0.9568 euros) (Reporting by Padraic Halpin, editing by Ed Osmond)