Debt-to-GDP ratio surges by more than 7 percentage points in first quarter
IRELAND's government debt, as a percentage of the value of the economy, jumped more than any other European country's in the first three months of this year.
The stark data from Europe's statistics office Eurostat shows that the country's debt-to-GDP ratio surged 7.7 percentage points in the first quarter.
The increase far outstrips the jump experienced by any other European country, with the second highest increase experienced by Belgium at 4.7 percentage points.
Ireland's debt-to-GDP ratio stood at 125.1pc in the first quarter. Figures released by the Central Statistics Office (CSO) last week showed that the quarterly deficit amounted to 13.8pc – far in excess of the 7.6pc target that the Government must meet this year as laid down under European rules.
But despite the high figures, University of Limerick economist Stephen Kinsella sounded a cautious tone.
He claimed examining one quarter in isolation could give a skewered picture.
"It's more of an accounting treatment," he said.
"Looking at quarterly debt data, it's just really risky. People are just booking different charges at different times and when they're annualised later on, they just don't have the same impact at all.
"It's way too early to tell from the national data yet. Be really cautious."
While Ireland recorded the biggest increase, the data shows that Germany and Estonia were the only two countries in the eurozone to reduce the debt-to-GDP ratios in the first three months of the year.
The figures come just weeks after revised data from the CSO showed that the country was back in recession.
The economy contracted in the second half of last year and shrank another 0.6pc in the first three months of 2013, with falling exports and the reluctance of austerity-weary consumers to spend primarily to blame.
Merrion stockbrokers economist Alan McQuaid said the debt-to-GDP level would have been pushed up by the fact that GDP in the first quarter was weaker than expected.
"The figures do highlight the fact that our debt problems are quite severe, but again the feeling is that our debt ratio should peak this year so this should be the worst of it," he said.
"My own feeling is that the GDP numbers will get better in the latter part of the year.
"The Department (of Finance) has given themselves enough leeway to get the deficit down."
Goodbody economist Dermot O'Leary said the debt issuance earlier in the year by the Government when it raised cash on the international money markets would also have contributed to the increased debt figure. "We're susceptible to that and at 125pc, it is a high debt level," he added.
The Department of Finance did not comment on the figures.