Irish Government debt as a percentage of gross domestic product (GDP), the metric that creditors look at, fell to under 35 per cent last year, down from 38.4 per cent the previous year.
At the worst point of the financial crisis, it was over 120 per cent. It’s not that the State’s gross debt (€210 billion in 2025) has shrunk that much; it’s just that the economy here has grown dramatically in the interim, meaning the State’s debt-carrying capacity, again the metric that creditors focus on, has strengthened.
Even when you discard GDP because of the multinational factor, our debt-to-GNI (the bespoke measure of national income here) came in at 62 per cent at the end of 2025.
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What makes these figures most interesting is just how out of kilter they are with peer group countries.
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In the United Kingdom (at the end of 2025), the country’s debt-to-GDP stood at 101 per cent. In France, it was 115 per cent. In the US, 121 per cent.
The speed at which US debt has grown is mind-numbing. It first reached $1 trillion in 1941. It hit $20 trillion in 2017, then doubled to $40 trillion in the intervening nine years.
Advanced economies are flirting with full-blown crises because of excessive debt. A recent report by the Institute for International Finance indicated that “mature market governments now spend more on interest expense than the world invests in either AI [artificial intelligence], defence, or energy”.
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The Republic, however, sits outside the danger zone with debt metrics that the UK and France would bite their arms off for.
Even the European Union fiscal rules are redundant from the State’s perspective. Forcing member states to keep their debt ratio at 60 per cent of GDP is too loose for the Republic.
Judged against GDP, the State is a bit fitter than it actually is, hence the call by the Irish Fiscal Advisory Council and others for the Government to adopt its own spending rule.
The new medium-term expenditure framework, adopted by the Government last year, seeks to put a 6 per cent cap on annual spending increases out to 2030.
Budget 2027 allows for a 5.9 per cent increase in spending, but as we’ve seen in the past, the Government has rarely kept to its budget spending plans.
