Dáil Éireann Debate, Thursday - 30 November 2017
44. Deputy Thomas P. Broughan asked the Minister for Finance the levels of expenditure on national debt interest payments in 2017; the projections for this expenditure in each of the years 2018 to 2021; the provision his Department has made for refinancing large tranches of national debt in the same period; and if he will make a statement on the matter. [47229/17]
Amharc ar fhreagraEstimates of National Debt interest expenditure for the period 2017 – 2021 were published by my Department at the time of Budget 2018, in Table A4 on page 47 of the Economic and Fiscal Outlook document.
Those estimates forecast that National Debt interest expenditure will be €6.1 billion in both 2017 and 2018, then falling to €5.9 billion in 2019, with subsequent falls to €5.7 billion in 2020 and €5 billion in 2021. These forecasts continue the trend of falling National Debt interest expenditure which has been observed over recent years.
The interest estimates are point-in-time estimates, reflecting the position as at the end of the third quarter of 2017. The estimates are based on prudent assumptions. Naturally, those estimates which are further out in the forecast horizon are particularly tentative. Updated estimates will be published next spring in the Stability Programme Update 2018.
As regards the refinancing requirement in coming years, the Deputy will be aware that significant steps have been taken in recent times to reduce that requirement and also to reduce the debt service burden.
In September I announced plans to repay early and in full the remaining IMF loan – which has an outstanding balance of circa €4.5 billion – as well as the bilateral loans from Denmark and Sweden – which have a combined outstanding balance of €1 billion. The Deputy will note the important approval of the European Financial Stability Fund (EFSF) to this proposal on Monday of this week.
This follows early repayments to the IMF of just over €18 billion between December 2014 and March 2015 which discharged IMF principal repayment obligations that were originally to fall due from July 2015 to January 2021.
Upon completion of the further early repayment, the full €22.5 billion loan from the IMF, as well as the €1 billion in loans from Denmark and Sweden will have been repaid ahead of schedule.
The NTMA continues to pre-fund ahead of future obligations and to build up significant cash and liquid asset balances. These balances stood at almost €15 billion at end-October.
The NTMA has also executed bilateral bond switches – redeeming early shorter-term bonds in exchange for longer-term bonds – and has reduced the 2018 – 2020 bond refinancing requirement by over €3.5 billion.
I am satisfied that the Exchequer is in a healthy position to fund the refinancing requirement over the coming years.
