Interest paid on Ireland’s borrowings to rise in coming years – report
The amount the State pays in interest on the country’s borrowings is going to rise in the coming years, a new report from the Department of Finance has warned.
The Annual Report on Public Debt says that Ireland owed €218 billion at the end of last year.
It amounts to €40,500 per person, which the report says is “high relative to other advanced economies”, and almost €8,000 higher than the average across the EU.
About €77 billion of Ireland’s debt falls due in the next five years.
Much of the country’s borrowings is locked in at relatively low interest rates.
When that debt is refinanced, Ireland will have to pay a higher rates.
Relative to Ireland’s national income, public debt amounted to 68% last year, nearly 30 percentage points lower than just before the pandemic when borrowings peaked at €236 billion.
Minister for Finance Paschal Donohoe warned: “The near-term, structural changes in the Irish economy, demographics, decarbonisation, digitalisation and de-globalisation will all have adverse consequences for the evolution of public debt and the public finances as a whole.”
He also warned that “the underlying fiscal position is much less benign than the headline figures suggest.
“The headline budgetary surpluses in recent years have been driven by significant increases in corporation tax receipts over the past decade. This volatile revenue stream arises from just a handful of firms.”
He said for this reason the Government will continue to invest in two long term savings funds to “mitigate the risks posed by these challenges.”
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