The Minister for Finance Michael Noonan has said the Government is planning to introduce a rainy day fund to help balance the economy when needed.

Minister Noonan has said the fund will be made up of €1bn a year contributions between 2019 and 2021.

The aim of the fund will be to stimulate the economy in times of recession, and will be used to allocate further money to in times of increased exchequer income.

The announcement was made as part of the Government’s Summer Economic Statement this afternoon.

Minister Noonan has said as the economy recovers the Government should have extra money to put aside for times of need.

“The Summer Economic Statement shows that the budgetary position is set on a safe and sustainable path and Ireland has now formally exited the Excessive Deficit Procedure, said Noonan.

“The Fiscal Space for 2017 will be just shy of €1bn. It is projected that Ireland will have a balanced budget in 2018.

“A new element in providing for key services for our citizens will be the introduction of a rainy day fund from 2019 following the achievement of a balanced budget.

“This is a prudent approach which reflects the lessons learned from the past. As the Irish economy tends to be more variable than elsewhere it is appropriate to set aside a certain amount each year. This can be used to support activity and employment if necessary.

You can read the Summer Economic Statement in full here.