Government debt grew by €5.5bn during the first three months of the year

The Government has forecasted running deficits over the coming years largely due to continued funding of the two wealth funds - Future Ireland Fund and the Infrastructure, Climate and Nature Fund.

General Government debt increased during the first three months of the year by €5.5bn to €215.4bn with further increases expected over the coming years, the latest data from the Central Statistics Office (CSO) shows.

As of the end of March, general Government debt as a percentage of gross domestic product (GDP) stood at 37% — an increase of 2.2 percentage points compared to the end of December. However, Ireland’s GDP is skewed by the presence of the numerous multinationals with operations here which inflates the overall number.

There was an increase in debt securities of €6.2bn during the first quarter which was partially offset by a decrease of €700m in loan liabilities. For this reason, the Government prefers modified domestic demand or modified gross national income as measures of economic growth.

Earlier this month, the National Treasury Management Agency (NTMA) said they are forecasting Government debt to increase to about €250bn by the end of the decade, with the cost of serving that debt potentially doubling.

As of last year, debt servicing costs stood around €3bn. That is expected to grow to €6bn by the early 2030s.

The Government has forecasted running deficits over the coming years largely due to continued funding of the two wealth funds — Future Ireland Fund and the Infrastructure, Climate and Nature Fund.

The CSO added that the market value of the State’s assets in equity and investment fund shares stood at €35bn at the end of March — a rise of €3bn compared to December. This increase in value was largely due to the Future Ireland Fund beginning to invest in a combination of quoted equities and investment fund shares.

Investment in short-term debt security assets fell by €9bn with holdings standing at €21.9 billion at the end of the quarter. This was largely explained by the State redeeming a significant proportion of its holdings in foreign treasury bills.

Investment in long-term bonds grew by €7.5bn which is mostly accounted for as a result of the Social Insurance Fund investing in European sovereign bonds.

The CSO data also showed that the Government generated €33.1bn in revenue during the first quarter of the year with expenditure hitting €32.4bn. This resulted in a general government surplus of €800m.

Taxes account for over 70% of all revenue. Overall taxes increased by €1.3bn, or 5.5% when compared to the first quarter of last year.

There were notable increases including Vat of €600m, up 8.7% and income tax up €700m, or 7.8%. Other drivers on the revenue side included an increase in social contributions of €500m.

Expenditure was €1.5 billion, or 5% higher than the same quarter in 2025. This is mainly due to a rise of €800m in social benefits, as well as a €600m increase in wages and salaries. Capital investment also went up by €200m.