Ireland's budget deficit shrank 18 percent in January compared to a year earlier after the state coffers were buoyed by delayed corporation tax receipts, official data on Thursday showed.

Under the terms of its EU/IMF bailout, Dublin must shrink its deficit to 8.6 percent of Gross Domestic Product (GDP) this year from an estimated 10.1 percent in 2011.

The central bank on Thursday warned a longer than projected global downturn would put Ireland's deficit targets for this year and next in doubt. It slashed its growth forecast to 0.5 percent from 1.8 percent.

The January deficit was 394 million euros, a fall of 89 million euros from the previous year. But the figures included 250 million euros (208 million pounds) of corporation tax which had been due for payment in December.

Tax receipts were up 17 percent to 3.67 billion euros. Revenues were helped by a 30 percent increase in income tax, which benefited from a year-on-year comparison with January 2011, when a new charge had not yet been included.

Value-added tax receipts increased by 3 percent on a year earlier. But the impact of a 2 percentage point VAT rise since January 1 was not clear as much of the revenue was linked to pre-Christmas trading.

On the surface it looks like a good start to 2012, but it's too early to draw conclusions, said Alan McQuaid, chief economist at Bloxham Stockbrokers.

Going forward the risk is on the VAT receipts more than anything else. It's unlikely hiking the tax rate is suddenly going to make people go out and spend money, he said.

Net voted expenditure was down 2.8 percent on a year earlier, a fall of 110 million euros, while total debt servicing costs were 483 million euros, an increase of 286 million euros.

The government last year beat its budget deficit goal of 10.3 percent of GDP under its EU/IMF bailout despite missing its tax revenues target.

(Reporting by Conor Humphries)