By Andras Gergely
DUBLIN, Nov 4 (Reuters) - Ireland's budget deficit nearly tripled in the first ten months of 2008 compared with a year earlier, figures showed on Tuesday, a day after the EU announced disciplinary steps for breaking its budget rules.
Ireland was 11 billion euros ($14.3 billion) in the red by the end of October, compared with an exchequer deficit of 3.9 billion the same time last year, finance ministry data showed.
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 European Commission on Monday forecast 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 commission said it would start disciplinary steps against Ireland for breaching the limit, but added that EU rules allowed longer budget deficit correction during a sharp economic downturn than the standard one year.
The Irish budget foresees a deficit of 6.5 percent of GDP next year.
"The (Commission's) forecast is not taking into account the commitment to restore the current budget to balance over the coming years," Prime Minister Brian Cowen told deputies in Ireland's Dail (lower house of parliament).
"If further expenditure control measures are required they will be adopted," Cowen added.
Tax revenue dropped to 31.5 billion euros by last month, compared with 34.9 billion a year earlier, the finance ministry said. That was 4.3 billion euros below target.
Reflecting the sharp downturn in Ireland's property market, the amount of stamp duty collected fell last month to 1.5 billion euros from 2.8 billion at the same time in 2007. Capital gains tax and value-added tax receipts also fell sharply.
"We expect things to get worse rather than better on the economic front over the next twelve months, pointing to public finances going further into the red and ... more conflict for the Irish government with the bureaucrats in Brussels," said Alan McQuaid, chief economist at brokerage Bloxham.