The Republic paid out €14 million a day or €5.2 billion last year in interest to service the national debt, new figures show.
The CSO's Government Finance Statistics report shows government debt rose to €206 billion last year, up from €201 billion in 2017, and remains one of the highest per-capita debt burdens in Europe.
While debt as a proportion of gross domestic product (GDP) has been falling – it dropped to just under 65 per cent in 2018 – the absolute level of debt has remained elevated since the crash, leaving the State vulnerable to sudden shocks.
When applying the CSO’s bespoke measure of national income, modified gross national income (GNI*), the State’s debt ratio is still more than 100 per cent.
The figures show the State’s debt service costs, or the interest it pays its creditors , continued to decrease in 2018, falling nearly 10 per cent to €5.2 billion.
"The debt ratio is coming down, which is important, and while the absolute level of gross debt remains elevated at €206.2 billion, at least debt servicing is manageable due to low interest rates, which are likely to be in place for some time," said Cantor Fitzgerald analysts Alan McQuaid.
“However, the fact that both the level of government debt and household debt are still very high does show how vulnerable the country is to a sudden external shock.”
Budgetary surplus
The CSO’s figures also show the State generated a budgetary surplus of €500 million or 0.1 per cent of GDP last year, the first such surplus in more than a decade.
The figures show 2018 saw increases in both government revenues, which rose 7.2 per cent to €82 billion, and expenditures, which rose 6 per cent to €82 billion.
The upward trend in tax and social contribution revenue continued with increases of €4.7 billion (+8.4 per cent) in taxes and €0.7 billion (+5.8 per cent ) in social contributions.
The State collected a record €10.4 billion in corporation tax, largely from multinationals. The increasing dependence on corporate tax is highlighted by the fact that it is now the State’s third-largest tax source producing 19 per cent of revenues, raising echoes of the dependence on construction taxes that existed before the 2008 crash.
The Government has also been accused of using bumper tax receipts to cover over cracks in public spending, particularly in the area of health.
The main drivers behind the increase in expenditure in 2018 was the public sector pay bill, which rose 7.5 per cent to €22.2 billion, and social benefits, which rose 2.5 per cent to €29 billion.
