Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Deputy. That is a really good question. In general terms, the real relevance of the measure of national debt is debt expressed as a percentage of national income. For Ireland, we have two key measures of debt, the first being as a percentage of GDP and the second being as a percentage of GNI*. Of course, the debt looks a lot more healthy as a percentage of GDP than it does as a percentage of GNI*. However, we need to get it on a downward trajectory. We believe that we will do that, primarily through growth in the Irish economy. I refer to all of the international forecasts that we are working to, from the OECD and the European Commission, which are complemented by domestic forecasts.

They point to a level of confidence that Ireland as a small open trading economy, which is well positioned to benefit from a recovery in the international economy, will see continued growth over the coming years. It makes it all the more important that in the coming years, we stop adding to the national debt. It will hit €250 billion next year. By 2025 it will hit €280 billion. Coming into Covid it was approximately €200 billion. This will represent an €80 billion increase in the national debt over the course of a five-year period. This is a reality we cannot escape. This is why our plan on the public finances is to close the budget deficit in order that we stop adding to the national debt and then that we grow the economy over the next number of years so the debt relative to the size of the economy shrinks. These are the twin strategies we have to pursue to make sure our debt is sustainable in the medium and long term.