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Economic Performance Fiscal Policy

Government Finance Statistics

The CSO have published the end-2013 update of these series:

There isn’t much to surprise in the figures.  Gross debt at the end of 2013 was €203 billion (124 per cent of GDP).  Once offsetting assets of €42 billion in the same categories are accounted for net debt was €161 billion.  The assets were:

  • Cash: €23.8 billion
  • Bonds: €10.8 billion
  • Loans: €7.1 billion

Other assets not used in the net debt calculation are include shares and other equity of €29.8 billion and other financial assets (mainly accounts receivable) of €9.2 billion.

The market value of Ireland’s €203 billion of nominal debt instruments was €219 billion at the end of the year.  The estimated pension liabilities of the government are put at €98 billion, while contingent liabilities are “just” €73 billion.

The 2013 general government deficit is provisionally estimated to have been €11.8 billion (7.2 per cent of GDP) from €13.4 billion in 2012.

The ‘operating balance’ of the government sector went from a deficit of €12.5 billion in 2012 to one of €11.8 billion in 2013, an improvement of just €0.7 billion.  The improvement in the overall deficit was greater because of changes in the capital budget.

Gross fixed capital formation was further reduced from €3.1 billion in 2012 to €2.7 billion in 2013.  With consumption of fixed capital at €2.3 billion the increase in the public capital stock was just €0.4 billion.  The main change in the capital account was a €0.7 billion gain in the ‘net acquisition of unproduced assets’ which likely relates to things such as mobile phone and lottery licenses.

Revenue from taxes and social contributions rose from €49.1 billion to €51.6 billion, while investment income was up around €0.5 billion to €2.7 billion. Much of these increases were offset by an increase in interest expenditure of €1.5 billion to €7.4 billion.  Social transfers paid decreased from €29.0 billion to €28.6 billion, of which €24.0 billion were in cash.

13 replies on “Government Finance Statistics”

@Seamus

For those of us not digging into this at the mo, can you or anyone else, expand on “while contingent liabilities are “just” €73 billion”?

@ grumpy,

It relates to the Eligible Liabilities Guarantee. The scheme was closed for new liabilities at the end of March last year but continues to cover existing liabilities until they are matured/redeemed. It is likely that around two-thirds of the €73 billion total refers to deposits (i.e. deposits over €100,000 not covered by the Deposit Guarantee Scheme). Over time the contingent liability should reduce. It is “just” €73 billion because it was greater then €300 billion back in 2008/09.

@Seamus,
Based on what you say, Ireland’s net position on nominal debt instruments is about 98% of GDP – or 26 percentage points below the gross position. Have you any feel for what the normal gap between gross and net positions might be for high debt developed countries?

OK – useful …

but I prefer ‘GNP’ as I view this metric as more relevant in terms of ‘repayment capability’ … and in terms of indigenous social & economic capability.

I note that Johnny Fitz has recently converted to GNP …..

… that said, the ESRI, IMHO, has lost a lot of credibility notwithstanding the number of ‘heads of standing’ within its community ….

… nor have I seen, 5 years later, any reasonably plausible explanation as to why the leading research institute in the state was caught with its pants/panties down while the Citizenry was sold down the toilet to the benefit of the systems of Money & Corporate Power. Methinks there must be a wee problem with how it ‘thinks’ but thus far little has emerged to throw any light on its blind spots.

@Seafoid, Seamus

The €98bn pension liabilities is arrived at using 5% as the discount rate.

Irish sovs, as you know, about 3%.

@ Grumpy

GRMA

5% on o/s debt obviously would not be ideal for the deficit but it’s high enough to discount the pension liabilities in order to get a reasonable number. And sure who is going to be looking too deeply into it anyway ?

@ BeeCeeTee,

Yes, Ireland would be unusually high in having debt instrument assets equivalent to 24% of GDP. In the EZ18, Ireland is second only to Finland which had a gap of 46% (2012 data).

The unweighted average for the EZ is 16%; take out Finland the the average is 14%. So we are around 10% of GDP above the average, though not necessarily for high-debt countries.

Greece 17.8%
Spain 14.9%
Italy 12.1%
Portugal 20.3%

Ireland also has the highest amount of these assets held as “current and deposits”. Our 15% of GDP cash reserve is more double the unweighted EZ average of 7.5% of GDP, though again high-debt countries seem to be above this.

Greece 10.6%
Spain 8.2%
Italy 4.8%
Portugal 11.6%

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