According to the latest monthly data from the Finance Department, for the first time since the start of the pandemic, the exchequer has recorded a surplus on a rolling 12-month basis.
Continuing strong tax revenues and a sharp drop in spending due to the neglect of COVID-19 supports resulted in a €32m positive balance for public finances over the 12-month period to the end of May.
The surplus at the date of the year was much larger, at €1.4bn, compared to a deficit of €6bn for the same period the previous year, although the 12-month rolling figure is considered a better indicator of the trend.
The recovery marks an effective end to the fiscal challenge linked to the pandemic after two years of massive government spending to support the domestic economy.
The tax rate on major heads of income tax, corporation tax and VAT remained strong in May.
A total of €30.1bn has been collected so far in 2022, up 27pc from last year, indicating an impressive rebound in employment, company profits and consumer activity.
May was a VAT month and total VAT collected in May was €2.9bn up 28pc on an annual basis, corresponding to a year-on-year increase of 27pc.
Corporate taxes, worth €5.2bn so far this year, have also made a significant contribution, as increased profitability in the multinational sector has led to unexpected gains.
Some of the improvement in the state’s financial condition can also be attributed to the effect of inflation through public finance as higher prices and wages boost the aggregate amount collected.
Spending fell by €2.6bn year-on-year to €38.9bn as a gradual withdrawal of pandemic aid schemes such as the Employment Wage Subsidy Scheme (EWSS), easing pressure on the exchequer.