Dáil Éireann Debate, Tuesday - 19 July 2016
226. Deputy Michael McGrath asked the Minister for Finance his views that Ireland’s updated headline debt-GDP ratio fell to 79% at the end of 2015, relative to a previous estimate of 94%, making Ireland’s debt sustainability position look better than it actually is; and if he will make a statement on the matter. [22881/16]
Amharc ar fhreagraThe growth rate in 2015 was exceptional in nature, and reflects the impact of a small number of large multinational firms. Alternative measures of growth, such as increases in consumer spending, tax revenue and employment gains clearly demonstrate that the economy is growing at a solid rate of around 4-5 per cent this year. These, and other indicators, are consistent with an economy where recovery is firmly established.
The general government debt-to-GDP ratio, as defined in the EU regulations implementing the Maastricht Treaty, is the standard measure used within the EU for comparative purposes. On foot of the revised GDP figures for last year, the debt-to-GDP ratio has fallen significantly.
Having said that, it is important to look at other metrics in order to accurately assess debt developments, especially given the distortions evident in last year's data. In this regard, an important measure is the proportion of tax revenues that must go towards servicing the interest on our debt. In the latest Government Finance statistics, published by the Central Statistics Office, it is estimated that around 13 per cent of tax revenues was required to service the interest on the State's national debt in 2015. Based on the Stability Programme Update April 2016 projections, by 2021 some 8 per cent of our total tax revenues will be required for that purpose.
In summary, while I welcome the continued decline in the debt-to-GDP ratio, I am conscious of the need for in-depth analysis of all the factors that affect our debt sustainability. My Department continuously monitors these factors.
