IRELAND HAS ONE of the highest gross public debt levels in the world according to figures released by the Department of Finance today, at just over €42,000 per person. 

At the end of last year public debt in Ireland is estimated at €223b, down from €236b at the end of 2021 but around €20b higher than just before the pandemic.

Minister for Finance Micheal McGrath welcomed today’s improving figures but highlighted a number of risks that exist in the long-term.

Gross debt has fallen from a peak of 166% of national income in 2012 to a figure of 76 per cent of modified gross national income at the end of 2023.

The Minister today warned that while the outlook for the next few years is positive, a number of risk factors have the potential to negatively impact Ireland’s debt level from 2030 and beyond. 

“While structural aspects of Ireland’s debt have, so far, insulated the public finances from the impact of higher interest rates, this will not last forever. Indeed, a significant portion of public debt will be exposed to higher interest rates in the coming years,” McGrath said.

Among the risks are the potential of a significant fall in corporation tax receipts.

Currently, one in every €7 collected by the Irish state comes from just 10 firms. 

Other structural changes that will impact the public finances beyond the short-term are changes to demographics (largely an ageing population), climate change, digitalisation and “de-globalisation”.

By 2030, the Irish state will need an additional €8b a year relative to just before the pandemic to maintain current service levels across areas like healthcare and pensions. 

McGrath said today that it was because of these potential risks that the Government has established two longer-term savings vehicles for the state – the Future Ireland Fund and the Climate and Nature Fund. 

“The objective of these funds is to ring-fence ‘excess’ corporate tax receipts in order to help finance these structural challenges,” McGrath said.

He added: “I am determined that we make the correct decisions now to ensure that we secure the State’s ability to deliver public services over the decades ahead.” 

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