Excessive government spending, according to the Fiscal Council, is a result of inadequate planning.
The Irish Fiscal Advisory Council (IFAC) has strongly criticised the Government's spending overruns as it prepares for Budget 2026. IFAC warns that actual spending in 2025 will overshoot initial estimates by more than €2 billion, highlighting "poor planning and budgeting" practices and a persistent failure to incorporate likely overspends into fiscal forecasts[1][3].
Key points from IFAC's analysis include:
- The Government is operating with a "weak fiscal framework", evidenced by the substantial deficit exceeding €2,500 per worker despite a strong economy and exceptional corporation tax receipts[1]. - Spending has increased faster than the economy’s sustainable growth rate, driven by recent budgets injecting cash into an already well-performing economy, which risks fiscal imbalance amid rising uncertainties and external challenges[1]. - IFAC urges that Budget 2026 and future medium-term fiscal plans start with accurate baseline figures that fully account for all likely 2025 overspends. This is essential to avoid creating unrealistic budget targets from the outset, a problem noted as recurring in recent years[1]. - The council's chair, Séamus Coffey, emphasised the need for government restraint on spending growth, even while allowing for investment in public services, infrastructure, and support for struggling households[1]. - On July 23, 2025, IFAC publicly accused the Government of poor fiscal planning with the 2025 budget initially planning for a €3 billion spending increase, only to revise it upwards by an additional €3.3 billion later in the year[3].
In summary, IFAC calls for better fiscal discipline and improved forecasting methods ahead of Budget 2026 to restore credibility to Ireland’s public finances and ensure sustainable spending growth aligned with the economy’s performance[1][3].
The Summer Economic Statement (SES), published on Tuesday, shows that planned expenditure for this year is now expected to be €108.7 billion, €3.3 billion more than Budget 2025. IFAC predicts that current spending is likely to be around €1 billion higher than the SES figures[4].
The trade talks between the EU and US could potentially impact the size of the budget package. If an accord isn't reached by the deadline, the EU has threatened to impose nearly €100 billion worth of retaliatory tariffs on US imports[5].
The budget deficit for next year, excluding windfall corporation tax receipts, is forecasted to be almost €11 billion[2]. €90.5 billion was allocated in the budget to current expenditure, or the cost of delivering public services[6]. €14.9 billion was allocated in the budget to capital expenditure.
IFAC's statements were confirmed by its chairman, Seamus Coffey[7]. The Government's budgetary plans are focused on the short term, with the Government's revised National Development Plan providing for €2 billion of the increase in spending for next year[2]. Countercyclical policy, according to IFAC, should provide more support when the economy is weak and less when it is strong[8].
References: [1] Irish Fiscal Advisory Council (IFAC), (2025), Statement on Budget 2026. Available at: https://www.ifac.ie/publications/statement-budget-2026 [2] Irish Examiner, (2025), Budget 2026: What we know so far about Ireland's spending plans. Available at: https://www.irishexaminer.com/news/arid-40768761.html [3] The Journal.ie, (2025), IFAC accuses Government of poor fiscal planning in 2025 budget. Available at: https://www.thejournal.ie/ifac-accuses-government-of-poor-fiscal-planning-in-2025-budget-4959975-Jul2025/ [4] Irish Times, (2025), SES 2025: Government to borrow €3.3 billion more than planned in 2025. Available at: https://www.irishtimes.com/business/economy/ses-2025-government-to-borrow-3-3-billion-more-than-planned-in-2025-1.46580613 [5] Reuters, (2025), EU threatens retaliatory tariffs on U.S. goods worth nearly $100 billion. Available at: https://www.reuters.com/world/us/eu-threatens-retaliatory-tariffs-us-goods-worth-nearly-100-billion-2025-07-21/ [6] Irish Independent, (2025), Budget 2026: How much is being spent on current and capital expenditure? Available at: https://www.independent.ie/business/irish/budget-2026-how-much-is-being-spent-on-current-and-capital-expenditure-41502343.html [7] RTE, (2025), IFAC chair Seamus Coffey says Government must deliver on fiscal commitments. Available at: https://www.rte.ie/news/business/2025/0723/1236482-ifac-chair-seamus-coffey-says-government-must-deliver-on-fiscal-commitments/ [8] Irish Times, (2025), Countercyclical policy should provide more support when the economy is weak and less when it is strong, says IFAC. Available at: https://www.irishtimes.com/business/economy/countercyclical-policy-should-provide-more-support-when-the-economy-is-weak-and-less-when-it-is-strong-says-ifac-1.46580617
- The criticism of the Government's spending overruns by the Irish Fiscal Advisory Council, as seen in Budget 2026 preparations, has sparked discussions in the realm of politics, business, and general-news, as concerns over Ireland's public finances arise.
- The Irish Fiscal Advisory Council, in their calls for better fiscal discipline and improved forecasting methods ahead of Budget 2026, have highlighted the need for consideration in sectors ranging from finance to politics and wider economic news.
