Tuesday, 29 September 2020

Ceisteanna (310)

Bernard Durkan

Ceist:

310. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which Ireland's debt as a proportion of GDP, GNP and GNI has fluctuated in the past ten years to date; if there is a need for corrective action; and if he will make a statement on the matter. [27349/20]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

For the purpose of this reply it is assumed that the Deputy is referring to GNI* rather GNI.   

The fluctuation in gross general government debt as a proportion of GDP, GNP and GNI* over the past ten years has been two-fold; a steady increase from 2009-2012 contrasted by a sharp decline from 2012-2019, across all three debt ratios.

The table below sets out the outturn data in respect of gross general government debt as portion of GDP, GNP and GNI* for the year 2009 to 2019 inclusive, which represents the finalised outturn data.

Year

Gross G.G. Debt as % of GDP

Gross G.G. Debt as % of GNP

Gross G.G. Debt as % of GNI*

2009

61.5

74.6

77.6

2010

86.0

103.6

111.8

2011

111.1

138.3

150.2

2012

119.9

150.3

166.0

2013

119.9

143.3

157.2

2014

104.2

124.2

136.4

2015

76.7

100.4

124.0

2016

74.1

91.3

114.8

2017

67.0

84.5

108.1

2018

63.0

80.3

103.6

2019

57.3

74.4

95.5

A significant milestone was achieved in 2019, with the debt-to-GDP ratio falling below the Stability and Growth Pact’s 60 per cent threshold for the first time since 2008. 

However, as the Deputy will be aware, the fiscal measures introduced to mitigate the worst effects of the pandemic (income supports for households and firms, ramping up healthcare capacity), have been largely financed by borrowing.  Accordingly, Ireland’s public indebtedness will increase as a result of this unprecedented shock to the economy.  This is also the case for almost all advanced economies.

Once the most intense part of the current crisis abates, it will be necessary to put the debt ratio on a downward trajectory - it is my expectation that this can mostly be achieved by economic recovery.