The National Treasury Management Agency (NTMA) realised €317 million in unexpected savings on servicing the national debt last year. The Minister for Finance Mr McCreevy is using the windfall to reduce the deficit in the public finances for 2002.
The savings, which resulted from technical factors such as low interest rates and favourable exchange rate movements, mean Mr McCreevy will report an Exchequer Borrowing Requirement of around €200 million for last year. When measured on an EU basis, the public finances will be in surplus.
In its end-year report, released late on Tuesday, the NTMA said Ireland continued to have the second-lowest general government debt (GGD) to GDP ratio of the 15 European Union member-states, with only Luxembourg enjoying a lower level.
At the end of last year, the national debt stood at €36.7 billion, representing a debt/GNP ratio of 35.3 per cent, down from 37.8 per cent a year earlier. Using the EU measure, the general government debt was €42.8 billion, an estimated 34.1 per cent of GDP compared to 36.7 per cent at the end of 2001.
On the basis of the recent Budget figures, the GGD/GDP ratio is expected to remain at around 34 per cent in 2003 and 2004, increasing marginally to 35 per cent in 2005, the NTMA said.
Interest payments on the debt totalled €1.66 billion and were the lowest since the early 1980s. They represented just 5.7 per cent of tax revenue, down from 6.7 per cent in 2001 and less than a quarter of the 24.7 per cent recorded 10 years ago.
The agency, which plans to issue €5.5 billion in bonds this year, said non-residents now hold more than 60 per cent of outstanding Irish government bonds compared with 53 per cent at the end of 2001.
Most of the NTMA's borrowings are in euros, after it reduced the sterling component of the national debt further to 2 per cent from 6 per cent last year.
The NTMA also runs the State Claims Agency, which has been in operation for over a year, managing public liability, employers' liability and property damage claims against the State. The claims agency has nearly 1,500 claims under active management currently, while a further 151 have been settled or otherwise closed.
A significant proportion of claims involve the Prison Service, the Garda and the Defence Forces while the main causes of injury are alleged asbestos exposure, road traffic accidents and falls, the agency said.
The State Claims Agency is also in the process of taking over the management of the State's clinical indemnity scheme, which covers medical negligence claims against hospitals, health boards, doctors and nursing staff.
The NTMA has also assumed responsibility for the National Development Finance Agency, which came into being yesterday, to advise State authorities on financing public investment projects. The NTMA is recruiting staff for the new agency and expects to have it up and running early this year.
