THE CENTRAL STATISTICS OFFICE has insisted that the state is “no better or worse off” as a result of an accounting error of €3.6 billion in the government finances.

Earlier today, the Department of Finance confirmed that payment between two state agencies – the National Treasury Management Agency (NTMA) and the Housing Finance Agency (HFA) – had been accidentally counted twice.

In a statement released this evening, the CSO explained that the figure for General Government gross debt (GGDebt) to the end of 2010 was incorrectly reported to Eurostat – the body which provides the EU with statistical information.

The correct sum was €144.4 billion (92.6 per cent of GDP) rather than the published €148.0 billion (94.9 per cent of GDP).

Definition of General Government Debt

Under EU regulations, GGDebt is defined as the total gross debt owed by all government bodies to third parties outside of government. Money owed by one government body to another does not count towards the GGDebt.

According to the CSO, the HFA borrowed €3.6bn from the NTMA for the first time in 2010: the office noted that the HFA had always sourced borrowings from the open market in previous years.

The CSO explained:

When compiling the end-2010 GGDebt figures, this €3.6 billion was mistakenly treated as external borrowings and was wrongly added to the GGDeb.

On the General Government balance sheet, end-2010 financial assets were also overstated by the €3.6 billion, as the loan from the NTMA to the HFA was incorrectly recorded as an open market bank deposit.

The CSO says it informed Eurostat of the error after the NTMA drew its attention to the mistake.

It added that the figures shown in respect of Ireland’s gross debt and the associated debt/GDP ratio “will be corrected in future releases relating to government debt”.

Read: Ireland’s finances €3.6bn better than thought – due to accounting error>