Press release
Minister Donohoe welcomes publication of Annual Report on Public Debt 2018
Published on
Last updated on
- Public debt in Ireland stands at over €200 billion;
- Outstanding public debt amounts to €42,000 for every person resident in the State, one of the highest in the developed world;
- By building up fiscal buffers we will be well placed to support the economy in time of need;
- Reducing public indebtedness must remain a priority.
The Department of Finance today (Monday) published its Annual Report on Public Debt in Ireland 2018, the purpose of which is to provide a comprehensive diagnosis of public debt dynamics in Ireland. The analysis shows that public indebtedness remains high in Ireland, in both historical and international contexts. At the end of last year, public indebtedness amounted to €201 billion; on a per capita basis this is the third highest in the developed world.
Annual Report on Public Debt in Ireland
The purpose of this report is to provide a comprehensive diagnosis of public debt dynamics in Ireland. It is the Department’s second annual report on public debt.
Download link for
Download
View the file
View
While the debt ratio continues to fall, this is due to strong income growth. In an increasingly uncertain world, it is important to reduce debt in order to ensure that the economy is well placed to withstand any future shocks.
The report highlights that structural aspects of Ireland’s public debt are relatively healthy. Active debt management has reduced the interest bill and lengthened maturity profiles. Having said that, the annual interest bill amounts to €5.8 billion – €1 of every €13 spent by the State is absorbed by interest payments. Reducing public debt would free-up some of these resources that could be deployed more usefully in other areas (those areas that bring lasting benefits to people).
Welcoming the analysis, the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, said:
“The analysis produced by my Department clearly demonstrates the importance of continued prudent management of the public finances. We are making solid progress in getting people back to work – employment levels are now at their highest ever – and we are implementing policies that deliver steady, sustainable improvements in living standards.
“However, at over €200 billion at the end of last year, it is crucial that we continue to stabilise the level of debt in Ireland and, subsequently, put it on a downward trajectory – this has been and will continue to be a key priority for Government. By reducing the burden of debt we will minimise the exposure of, and risks to, the economy. I have outlined on a number of occasions the need to build up fiscal buffers that can be deployed to support the economy in the event of a shock.”
To address the burden of public debt in Ireland, the report makes a number of suggestions, including:
- using windfall gains to reduce the nominal debt;
- continuing to enhance credibility in order to minimise refinancing costs;
- implementing structural reforms that boost the growth potential of the economy.
In terms of policy, Minister Donohoe said:
“The Government’s objective as set out in the Summer Economic Statement is to balance the budget over the economic cycle and to use windfall receipts for debt reduction. Our budgetary approach is anchored in steady, incremental improvements in public services underpinned by sustainable revenue streams. We will achieve the medium term goal of a balanced budget next year. This, as well as the establishment of a Rainy Day Fund, will help to build up the resilience of the economy and prepare us for the challenges ahead.”
ENDS
- This is the second Annual report on public debt in Ireland published by the Department of Finance.
- There is no legal requirement to produce this report – it is produced by the Economics Division in order to enhance transparency and improve awareness of the issues raised.
- Debt-to-GNI* peaked at 166 per cent in 2012 and was 111 per cent at the end of last year.
- On a per capita basis, only in the US and Japan is debt higher than in Ireland.
- The analysis in this paper looks only at public debt – it does not focus on household or corporate debt.