National debt is €42k per person

IRELAND’S national debt has fallen slightly to €42,000 per person, in what is one of the highest gross public debt levels in the world.

The figures published yesterday indicate that public debt represented 76% of the modified gross national income last year.

Minister for Finance Michael McGrath said that Ireland’s debt of €223billion was ‘very significant debt for a small, open economy’. Ireland’s chief economist John McCarthy said there are only a handful of countries in the world that have a higher level of per capita debt, including Japan, Belgium and Italy.

Mr McCarthy said that the decrease in public debt per person is both because the number of people in Ireland has increased and the amount of debt overall has fallen. He said that the risks facing the public finances include an overreliance on corporation tax, as around 60% of overall receipts come from 10 firms and half of last year’s €23.8 billion in corporation tax revenue is windfall.

‘One shock, if the excess corporate tax was to evaporate overnight... there will be a big hit on public debt: about 15 percentage points higher by 2035,’ he said. From about 2030/2035 onwards, there are ‘less benign type of scenarios’ for public debt as ‘slow moving structural changes begin to really bite’.

Mr McCarthy said that if there are no policy changes made, the ratio of workers to retired people will shift from four workers for every retiree currently, to two people working for every retiree in 2050. He said that after 2030 the cost to maintain healthcare services will increase sharply due to a change in demographics.