Peadar Tóibín
Question:103. Deputy Peadar Tóibín asked the Minister for Finance his plans in relation to debt that has built up as a result of the Covid-19 pandemic. [17077/21]
View answerWednesday, 31 March 2021
Questions (103)
Written answers
As the Deputy will be aware, the pandemic and the necessary public health measures introduced to control the spread of the virus have had a huge impact on our economy and our society.
In response the Government has acted decisively and on an unprecedented scale to support households, businesses and our health sector. Almost €38 billion in fiscal support has been provided representing almost a fifth of national income.
The range of pandemic-related supports will continue as long as is necessary, and will only be withdrawn, in a gradual and responsible manner, when it is appropriate to do so. This is a reflection of Government’s commitment to continuing to support our economy as we face the current phase of the pandemic.
The careful management of our public finances before the onset of the pandemic allowed us to enter the crisis from a position of strength and to act decisively. However, the suite of pandemic-related supports introduced to mitigate the worst effects of the pandemic, have been largely financed by additional borrowing.
Last year our debt-to-modified national income ratio rose to 108 per cent and is set to rise further this year. Although, the low interest environment that we find ourselves in means that, despite this sharp increase in debt, interest costs are actually falling. However, as we emerge from lockdown and reopen our economy it will be essential that we restore the public finances to a sustainable footing and ensure that we do not risk becoming a fiscal outlier.
We will aim to service our increased debt by growing the economy and the fundamental strengths in our economy – as seen by some of the underlying trends in our tax figures - will help us to do that.