Every man, woman and child in the country owes €44,000 each as part of the national debt, making Irish people among the most indebted in the world.
Finance Minister Michael McGrath revealed on Friday morning that the national debt has actually gone up by more than 10% since just before the pandemic started three years ago, from €203billion to €226billion, leaving every citizen owing a portion worth almost €50,000.
This is an estimated 86 per cent of national income.
One of the main reasons is because the State had to spend so much taxpayers’ money just to keep the economy afloat during Covid.
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And the terrible war in Ukraine and the associated cost of living crisis has meant the Government has to dig deep again to help out homes and businesses.
The figures are contained in the Department of Finance’s sixth annual assessment of public indebtedness, the Annual Report on Public Debt in Ireland 2022.
Mr McGrath said: “The analysis published by my Department today highlights the risks now facing our public finances, following the unavoidable increase in public indebtedness during the pandemic.
“The war in Ukraine and the associated energy price shock have induced a cost-of-living crisis, placing renewed pressure on the State’s fiscal position.
“We face these challenges with elevated debt levels; Ireland continues to have one of the highest per capita debt ratios in the developed world.
“Several structural features of Ireland’s debt, with the majority of debt locked in at fixed prices and relatively long maturities, insulate us somewhat from the changing interest rate environment brought about by these shocks.
“Nevertheless, the re-financing of our existing debt over the medium-term will most likely lead to increased debt servicing costs, the first call on the public finances.”
“Looking ahead, Government is also aware of the major challenges on the horizon.
“The need to finance an ambitious infrastructural plan, as well as shifting demographics and the transition of economic activity to carbon-neutrality, will impose large costs on the public finances.
“Additionally, the public finances are vulnerable to a shock to corporation tax receipts or to the multinational sector in Ireland generally, which could potentially result in a very large deficit.
“It is essential that the public finances stand ready to deal with these challenges.
“This report underlines the need for prudent management of debt and the re-building of our fiscal buffers.
“Government is committed to cultivating a dynamic and sustainable economy, while ensuring our ability to meet the fiscal challenges that lay before and ahead of us.”
A departmental spokesman added: “The key message from the report is that the level of indebtedness remains high, despite the return of the debt-income ratio to a downward trajectory.
“There are significant risks to the public finances, with both immediate and medium-term challenges pressuring the state’s fiscal position, and clear vulnerabilities relating to our dependence on corporation tax receipts.
“This further underlines the need to manage the national debt in a prudent manner, ensuring public finances are in a strong position to withstand these challenges.”
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