June 15, 2019 / 1:45 PM / 6 months ago

Irish spending growth to slow in October budget - PM

FILE PHOTO: Ireland's Prime Minister (Taoiseach) and Defence Minister Leo Varadkar arrives ahead of a European Union leaders summit after European Parliament elections to discuss who should run the EU executive for the next five years, in Brussels, Belgium May 28, 2019. John Thys/Pool via REUTERS/File Photo

DUBLIN (Reuters) - The Irish government plans to slow spending growth at its budget in October, Prime Minister Leo Varadkar said on Saturday, after the Central Bank and state budget watchdog warned of signs of overheating.

Ireland has been Europe’s best-performing economy since 2014 and its Fiscal Advisory Council has warned of an over-dependence on a small number of multinational companies for corporate taxes, which are vulnerable to change with the global business cycle.

“This budget coming ... will need to be tighter than the last one in terms of the extent to which we increase spending,” Varadkar told RTE radio in an interview.

“We need to make sure that the spending increases are more in the range of 4-5% rather than 7-8%,” he said.

The government is aiming to record its first budget surplus in more than a decade this year and plans to grow that next year to “somewhere in the region of 1 billion” euros, Varadkar said.

The government plans to announce its annual budget weeks before Britain is to leave the European Union and will prepare two budgets - one in case Britain leaves the EU with a deal and another for a no-deal Brexit in which growth would be expected to “slow dramatically,” Varadkar said.

Reporting by Conor Humphries; Editing by Andrew Cawthorne

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