By Andras Gergely
DUBLIN (Reuters) - Ireland swung 7.9 billion euros in the red by the end of November as tax receipts fell almost as much behind TARGET (TGT.NY) prompting the government to warn it will miss one of its targets presented in the 2009 budget in October.
Ireland on Tuesday posted a budget deficit of 7.9 billion euros (6.74 billion pounds) in the first 11 months of 2008, compared with a 1.6 billion euro surplus a year earlier.
While the exchequer deficit fell from 11 billion euros at the end of October, it contrasted with November 2007 when Ireland managed to inch back into the black, finance ministry data showed.
"There is now a major gap between spending levels and tax receipts," Finance Minister Brian Lenihan said in a statement.
"The 2009 Budget envisaged a current budget deficit of 4.7 billion next year," Lenihan said. "Given the developments in the last two months it is inevitable that this deficit will be higher."
Ireland, the first euro zone country to enter recession this year, brought forward its 2009 budget to mid-October, warning that it would break EU budget deficit rules even after implementing a range of tax rises and spending cuts.
The budget was presented early to reassure the public and investors, but some analysts warned at the time that bringing it forward from the usual December date would also reduce visibility by two months.
"It is essential that further measures are identified to ensure the sustainability of the public finances," Lenihan said. The focus will be on spending cuts but a capital investment programme to boost the economy will go ahead, he said.
The European Commission forecast last month that Ireland's budget deficit would increase to 6.8 percent of gross domestic product next year from 5.5 percent in 2008 and to 7.2 percent in 2010, all well above the EU's 3-percent limit.
The Irish budget foresees a deficit of 6.5 percent of GDP next year.
Tax revenue dropped to 38.9 billion euros by last month, compared with 44.7 billion a year earlier, the finance ministry said. That was 7.4 billion euros below target.
Reflecting the sharp downturn in Ireland's property market,
the amount of stamp duty collected fell last month by half to 1.5 billion euros from almost 3 billion at the same time in 2007.
"November is a disappointing month and next month also will follow on from that," Prime Minister Brian Cowen said.
"It reflects not just in relation to the construction industry, but more broadly a slowdown across the economy," Cowen told a parliamentary debate.
(Editing by Ron Askew)
