Business

Wednesday 21 August 2019

Cost of servicing national debt next year to be €3bn less than at its peak in 2014

NTMA boss Conor O’Kelly. Photo: Frank McGrath
NTMA boss Conor O’Kelly. Photo: Frank McGrath
Donal O'Donovan

Donal O'Donovan

The cost of servicing the national debt will be €3bn less next year than it was at the peak in 2014, even though the overall debt is higher.

The National Treasury Management Agency  (NTMA) says the interest bill for the State will fall to €4.5bn next year from an expected €5bn this year.

READ MORE: NTMA borrows €1bn at record-low rate

In 2014, €7.5bn of tax income went on debt interest. Borrowing costs for eurozone countries, including Ireland, have fallen to record lows this year, boosted by expectations the ECB will continue to prop up the market.

However, NTMA chief executive Conor O'Kelly warned that Ireland’s debt levels remain high, creating significant exposure to rising interest rates in the medium term, even though some large debt repayments - dubbed chimneys - had been refinanced at lower costs.

“As we look past Ireland’s unusually high refinancing requirements or 'chimneys' out to 2020, we must remain conscious of the challenges ahead, including the risks arising from Ireland’s elevated debt levels," Mr O'Kelly said.

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