Dáil Éireann Debate, Tuesday - 23 September 2014
164. Deputy Eoghan Murphy asked the Minister for Finance the cost to the Exchequer of interest repayments on the national debt; the changes in comparison to the previous year and forecasts for next year; the amount these interest repayments will increase as a result of borrowing to fund the deficit in 2015. [35631/14]
View answerInterest payments on the National Debt to end August 2014 amounted to €4,829 million. The Budget 2014 consistent profile forecast interest expenditure to end August 2014 of €5,220 million. This reduction of €390 million on profile is primarily due to the December 2013 bond-buy back which resulted in lower interest expenditure in the early part of 2014, lower than expected costs from bond issuance so far this year and a favourable rate reset on the floating rate bonds post-Budget last December.
However, as general government debt expressed as a percentage of gross domestic product is the standard metric internationally for assessing debt levels, this is the more appropriate metric to look at. General government debt is made up of National Debt and debt from all bodies classified within Government. Interest repayments to service the National Debt are sourced from the Central Fund and are shown on the Exchequer Statement under non-voted current expenditure. The service of debt from bodies classified within Government may be paid from own-resource income or from funding allocated to those bodies.
Budget 2014 forecast general government interest expenditure of €8,755 million in 2015 on an ESA 95 basis. This was revised down to €8,452 million in the April 2014 Stability Programme Update (SPU) primarily due to the changing interest rate environment. Budget 2015 will contain a further update to the estimate for interest expenditure in 2015 which will be on an ESA 2010 basis.
With regard to the portion of interest that relates to the deficit, the NTMA borrow not just to fund the expected deficit but also for repayments of other debt and as part of the overall debt management strategy.
Budget 2015 will also contain an updated figure for the projected underlying general government deficit in 2015. The Deputy should note the last published forecast in the SPU of €5,135 million was also prepared on an ESA 95 basis rather than the ESA 2010 basis that will be used in the Budget in October.
