In the latest Annual Report on Public Debt in Ireland, concerns are raised on Ireland’s relatively high debt levels compared to European peers and historical levels. As of 2018, Ireland’s debt-to-GNI stood at 104%.
The report published baseline forecasts as well as those under a shock scenario. Under the baseline, debt-to-GNI is projected to fall steadily each year and reach 87% in 2023. Over
this period, the government is expecting to run a general surplus of 0.2% of GDP in 2019 and reaching 1.3% in 2023.
Under the shock to public finances in the form of significant macroeconomic headwinds, the debt-to-GNI ratio would be 25% higher by the mid-part of the next decade.
Goodbody Stockbrokers believe a prudent use of Ireland’s fiscal tools is needed, especially given the binary outcome that Brexit could have on the economy’s public finances. Goodbody say the report is encouraging in that a key focus of the Department of Finance is to address the high levels of debt.
According to Goodbody Stockbrokers, "The focus on lowering Ireland’s national debt is encouraging, so too is the trajectory in which these levels are moving over the forecasts. That being said, projections under macroeconomic headwinds leave a cloud looming as we head closer to the Hallowe’en Brexit deadline in which the chances of a no-deal outcome are mounting. While little more can be done to prepare the public finances for a nodeal, the prudent approach is to see revenue growth outpace that of expenditure and continue to pay down Ireland’s national debt."
Source: www.businessworld.ie
