Written answers
Thursday, 30 October 2008
Department of Finance
Fiscal Policy
6:00 pm
Richard Bruton (Dublin North Central, Fine Gael)
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Question 100: To ask the Minister for Finance the increased provision in 2009 over 2008 in respect of interest sinking fund and debt management expenses, distinguishing the increase due to higher interest rates, higher debt levels and earlier repayment schedules; and if he will make a statement on the forecast of Government debt servicing during 2009. [37757/08]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The increase in debt service costs in 2009 is primarily due to the increase in the Exchequer borrowing requirement for 2008 and 2009, which is a direct consequence of the changed economic and fiscal realities that we now face. The level of the sinking fund is related to expected borrowing in respect of expenditure on voted capital services. My Department is informed by the NTMA that the debt service estimate for 2009 is €3,956 million. A breakdown of the increase in debt service cost as supplied to me by the Agency for 2009 over 2008 is given in the following table.
Debt Service | € million |
2009 (Budget 2009) | 3,956 |
Forecast Outturn 2008 (Budget 2009)* | 2,192 |
Increase | 1,764 |
Explained by: | |
Cost of funding 2008 & 2009 EBRs | 1,360 |
Higher interest rate on replacement of €5bn bond maturing in 2009 | 77 |
Accrued interest on commercial paper issued in 2008 and maturing in 2009 | 220 |
Increased Sinking Fund payments | 84 |
Debt management expenses | 23 |
Total | 1,764 |
*2008 estimate was €2,490 million in Budget 2008. |
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