Written answers

Tuesday, 7 March 2023

Photo of Matt ShanahanMatt Shanahan (Waterford, Independent)
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224. To ask the Minister for Finance the strategy and timeline his Department has in relation to reducing Ireland’s national debt given that, according to the Department’s own report on public finances, it currently has one of the highest per capita debt burdens in the world, being noted as €226 billion at the end of quarter 4, 2022; and if he will make a statement on the matter. [11668/23]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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At the outset, I would highlight that it is not for the civil service - in this case my Department - to reduce national debt; policy is always the responsibility of Government.

At the end of last year, Ireland's public debt stood at an estimated €226 billion. To put this into perspective, it is the equivalent of €44,250 for every resident of our country, a figure that is amongst the highest in the world.

Recognising this, and the need for a broad understanding of the challenges this creates, my Department publishes an annual assessment - the Annual Report on Public Debt in Ireland - with the 2022 version published last month.

As outlined in the report, despite the increase in the stock of Irish debt throughout the pandemic period, the debt-to-GNI* ratio decreased from approximately 109 per cent in 2020 to 101 per cent in 2021 and further to 86 per cent in 2022. This was due to the rapid rebound in economic activity post-pandemic as well as the strong corporate tax revenue performance.

Furthermore, underlying structural aspects of the debt provide some short-term re-assurance - a relatively low debt service burden, for instance.

That being said, my Department's analysis highlights a number of risks and vulnerabilities, including the risks associated with an over-reliance on corporation tax revenues, as well as the recent increase in the regularity of unforeseeable economic shocks.

In order to maintain the ability to deal with such shocks, as well as tackle the medium-term challenges of the digital and climate transitions alongside the fiscal costs of an ageing population, sensible, stability-oriented budgetary policies are needed and that is what the Government intends to do.

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