Michael Creed
Question:344 Mr. Creed asked the Minister for Finance the size of the national debt in each of the years from 1997 to date; and if he will make a statement on the matter. [1260/00]
Written Answers. - National Debt.
The following figures give details of the general Government debt-GDP ratio from 1997 to 1999. Also given are the debt-GDP projections included in budget 2000 for the years 2000 to 2002.
General Government Debt/GDP Ratio:
|
1997 |
65% |
|
1998 |
56% |
|
1999 |
52% |
|
2000 |
47% |
|
2001 |
40% |
|
2002 |
36% |
The following figures give details of the level of the National Debt at each year-end:
|
1997 |
IR£30,689 million |
|
1998 |
IR£29,541 million |
|
1999 |
IR£31,383 million* |
*Provisional.
The level of indebtedness has been falling in recent years due to the running of Exchequer surpluses and this decline is expected to continue in the medium term.
The increase in the debt between 1998 and 1999 reflects the accounting effect of the securities exchange programme and the absorption of FEOGA debt IR£375 million into the national debt. The Securities Exchange Programme was carried out by the NTMA in 1999 in order to ensure the competitiveness of Irish Government bonds in the new euro trading environment. Under the programme old bonds with a high interest coupon were exchanged for a larger amount of new bonds with a lower interest coupon close to current market rates. If the impact of these exceptional items is excluded the debt would have fallen by circa IR£1,360 million. However, the increase in debt due to the programme will be compensated for by a reduction in debt service costs as lower coupons are paid on the increased amount of debt. In other words, the market value of the debt is not affected by the exchange of bonds. The overall effect of the programme is that the Exchequer should be able to raise funds at a cheaper rate than would otherwise be the case.
The Deputy will recall that part – £2.417 billion – of the Telecom receipts and interest realised of £16 million were placed in 1999 into a temporary holding fund pending transfer to the proposed new funds designed to meet future state pension liabilities. Furthermore an annual contribution of 1% of GNP – £582 million in 1999 – beginning in 1999 is being set aside towards these future costs. Thus a total of £3.016 billion was lodged to the temporary holding fund in 1999. This amount is not reflected in the figures set out above.