External debt drops €5bn in third quarter

IRELAND’S external debt levels fell by €51 billion during the third quarter of last year, according to latest figures from the CSO.

External debt basically forms the part of a country’s overall debt that is owed to creditors based outside of the country and can include monies owed to a variety of sources, including commercial banks, companies, other governments and international financial institutions such as the IMF and the World Bank.

The latest CSO figures published yesterday show that our foreign debt levels, as of the end of September, stood at a fraction under €1.64 trillion – down from €1.69trn at the end of last June and the second quarter of 2009.

Our external debt figure has – barring a minimal increase during the first three months of last year – steadily declined since the end of 2008. Although monies owed to overseas governments rose from €72.1bn to €73.4bn in the third quarter of last year (and have steadily increased from €57.7bn from the end of 2008); the biggest area of debt remains to what the CSO lists as ‘monetary financial institutions’ or commercial banks. Debt in this category has declined from €767.7bn as of the end of 2008 to just shy of €690.8bn as of the end of last September.

‘Monetary authority’ liabilities – such as to the IMF – decreased by €48bn in the quarter under review to €56bn. “This was due to decreases in Ireland’s end quarter liabilities to the European System of Central Banks,” said the CSO.

“It should be noted that much of this external debt is offset by holdings of foreign financial assets by Irish residents,” it added.