Friday, December 12, 2008
THE national debt is heading inexorably towards a record €78 billion over the next three years, figures released by the National Treasury Management Agency (NTMA) yesterday reveal.
This will be €37,000 for every currently employed worker in the State.
The national debt stood at €45,453bn at the end of November, up from €38bn at the beginning of the year. The NTMA anticipate Finance Minister Brian Lenihan will have budget deficits of €13.4bn in 2009, €11.2bn in 2010 and €8.5bn in 2011.
The cost of servicing the national debt is also expected to soar in the years ahead, to close to €4bn a year by 2011.
Late yesterday, the NTMA, the asset and liability management arm of the Government, said they expect to issue a series of Government bonds and debt over the next three years totalling €43.4bn; €18.5bn in 2009, €12.4bn in 2010 and €12.5bn in 2111. They also plan to retire €10.3bn in debt over the same period, €5.1bn in 2009, €1.2bn in 2010 and €4bn in 2011.
This will result in net new debt of €33.4bn, when added to existing debt of €45.5bn this gives a national debt of €78bn by 2011.
This does not include the €1bn or so extra debt that will be added to the national debt this December.
To finance the growing debt mountain the NTMA said it plans to hold a series of bond auctions in 2009, including scheduled auctions which will be announced to the market each quarter and, should the occasion arise, extraordinary auctions responding to investor demand.
"The current and new on-the-run bonds will be auctioned so as to achieve a target size of €8bn to €10bn for each bond.
"In each auction, one to three bonds may be offered and the NTMA would envisage total auction sizes in the range of €1bn to €1.5bn.
"The NTMA also intends to issue at least two new bonds by syndication in 2009. Bond auctions would not normally be held in the months in which a bond is issued through syndication," the NTMA said.
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