Ireland’s debt: €44,365 is owed by every man, woman and child in the State
CSO numbers show burden is four times higher than pre-crisis levels
The ultra-low interest rate environment has contributed to significant reductions in the amount of interest that the State is currently obliged to pay.
Even with the rapid turnaround in employment and growth, Ireland still has one of the highest per capita debt levels in the world.
Central Statistics Office (CSO) figures, published on Friday, show it equates to €44,365 for every man, woman and child in the State or nearly €90,000 for every worker in the economy.
The per capita figure is calculated by taking the State’s national debt – €215 billion – and dividing it by the Republic’s population.
While this represents a slight reduction from the peak of €47,514 in the first quarter of 2013, it is still more than four times higher than the pre-crisis level of €10,667 recorded in first quarter of 2007.
The Government has been repeatedly warned that having such a large debt pile leaves the economy more at risk to shocks such as Brexit.
The figures show that General Government Net Debt stood at €215.5 billion at the end of the first quarter of this year, which equates to 65.6 per cent of gross domestic product (GDP), the standard measure of national income.
This compares with a debt level of 63.6 per cent of GDP at the end of last year. The increase in the debt ratio is due mainly to increased net issuance of short-term and long-term debt securities of €3.6 billion and €4.7 billion respectively, the CSO said.
The head of the National Treasury Management Agency (NTMA) revealed earlier this month that the State has paid out more than €60 billion in interest on the national debt over the past decade.
That is three times the amount paid in the previous decade, NTMA chief executive Conor O’Kelly said.
The ultra-low interest rate environment has contributed to significant reductions in the amount of interest that the State is currently obliged to pay. The cost of servicing the debt has fallen to €5 billion this year, and will be in the region of €4.5 billion next year, some €3 billion less than it was in 2014.
The low rates have also allowed the NTMA to eliminate three so-called debt refinancing “chimneys” in 2018, 2019 and 2020 without any hiccups, putting the State’s debt refinancing requirements on a smoother trajectory.
Nonetheless experts and agencies warn that the European Central Bank’s low-rate policies will not last forever and that Ireland remains more acutely exposed to shocks and a cycle of rate rises because of its elevated debt level.
Mr O’Kelly said the only sustainable way of reducing the State’s monster debt was to continually run budget surpluses and to keep a tight rein on spending.