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The Central Bank of Ireland in Dublin Alamy Stock Photo
National Debt

Ireland's national debt falls for the first time since 2019

The total general national debt now stands at €‎225 billion.

IRELAND’S NATIONAL DEBT fell by €11 billion last year, according to the National Treasury Management Agency’s (NTMA) annual report for 2022. This was the first reduction since 2019 and the largest since 2014. 

The total general national debt now stands at €‎225 billion and NTMA chief executive Frank O’Connor said he believes it “has the potential to fall below €200 billion by 2030”.

The fall in the country’s debt, according to O’Connor, can be attributed to the NTMA’s funding and debt management strategy, which “has helped to mitigate the effect of higher interest rates, with the 2022 interest bill unchanged versus 2021”. 

That rate amounts to an interest bill of €3.3 billion, which O’Connor puts down to the fixing of borrowing costs at “historically low rates for long terms”. 

O’Connor said in a statement accompanying the report’s release that Ireland has entered a higher interest rate cycle “in a strong position”. 

“Ireland needs to borrow less over the coming years as a result of our pre-funding strategy, strong cash balances and a favourable Exchequer position,” he said. 

Additionally, Ireland’s status in the eyes of credit ratings agencies remains positive. This, O’Connor says, is evidenced by strong demand for government debt which has continued into this year. 

After an upgrade, Standard and Poor’s now rates Ireland in the AA bracket for the first time since 2010. 

“This positive sentiment underlines the importance of maintaining close ongoing contact with investors through the combination of an ongoing investor relations programme and careful management of new issuance,” O’Connor’s statement read. 

“I am very pleased to see investor and ratings agency sentiment towards Ireland remaining positive, as evidenced by the strong demand for our debt and the pattern of ratings upgrades,” said minister for finance Michael McGrath. 

He praised the work of the treasury agency, saying the annual report “highlights the value provided to the State by the NTMA, with the Agency continuing to both communicate and engage with market counterparties on behalf of Ireland to ensure that our borrowing requirements are met.”

“The benefits of the NTMA’s strategy of pre-funding liabilities before they became due continue to deliver through having locked in long-term borrowing on favourable terms.” 

The NTMA report comes after last week’s assessment released by the Economic and Social Research Institute’s (ESRI), which predicted that the Irish economy’s growth will remain “strong” this year and into 2024. 

Taoiseach Leo Varadkar also revealed the government’s intention to introduce tax cuts in the next budget despite the ESRI saying that there was “no rationale” behind such a decision. 

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