‘Goldilocks’ Irish economy faces numerous threats - NTMA chief

State still borrowing money just to pay interest costs, event told

NTMA chief executive Conor O’Kelly. Photograph: Sara Freund/The Irish Times

NTMA chief executive Conor O’Kelly. Photograph: Sara Freund/The Irish Times

 

Ireland is still borrowing money just to pay its interest costs,” the chief executive of the country’s debt agency said at an event in Dublin on Friday.

Speaking at the Ireland Strategic Investment Fund (ISIF) market engagement event, Conor O’Kelly, the chief executive of the National Treasury Management Agency (NTMA), flagged that while Ireland’s debt to GDP ratio had fallen below the European average, the fact that our debt is 2.7 times government revenue is a concern to investors.

“The interest bill is our fourth largest Government expense - after social protection, health and education. It costs €16.5 million per day just to service the interest on our national debt,” he said.

Mr O’Kelly said that while some are referring to Ireland as the Goldilocks economy - not too cold, not too hot, but just right - the NTMA is concerned about Brexit, rising interest rates and Ireland’s exposure to US multinationals in the global tax environment.

Increase debt bill

The NTMA executive noted that the low interest rate environment is coming to the end, something which will ultimately increase Ireland’s debt bill. He said that Ireland has been “one of the largest beneficiaries of the current monetary policy”, but that we’re still a “very indebted country”.

Notwithstanding all the concerns, Mr O’Kelly said Ireland is better known for how it got out of the crisis than for how it got into it and “Ireland’s reputation is strong”.

“Confidence in our policy makers and politicians is justifiably high and that confidence is reflected in our tight credit spreads,” he said.