NTMA says Ireland in a good position to manage debt

The cost of borrowing soared for the French and British governments earlier this week, as investors fretted about rising public debt and over-supply of bonds in the eurozone.

The debt crisis is becoming so bad in Britain that comparisons have been made with the 1970s, when the country had to seek a bailout from the IMF. The chancellor Rachel Reeves said economists who suggested this were “talking rubbish”.

This week the yield on 10-year French government bonds climbed to 3.6pc, above Greece’s and level with Italy’s, which usually sets the high watermark in the eurozone. The 30-year Germany bond yield reached 3.434pc on Wednesday, the highest in over 14 years.

However, the NTMA’s director of funding and debt management, Dave McEvoy, insisted that Ireland is well positioned to navigate the uncertainty global bond markets.

“Almost all of Ireland’s public debt is at fixed rates of interest and the debt-service bill is benefiting from locking in low interest rates in recent years,” he told the Irish Independent.

“Ireland’s public debt also has a long weighted average maturity, meaning lower refinancing needs in the short-to-medium term.”

Mr McEvoy added that, so far this year, the NTMA has issued €5.25bn of bonds, from a target funding range of €6bn to €10bn. The NTMA’s next bond auction – its third this year – is being staged next week.

The agency has previously pointed out that the debt interest cost last year was €3.2bn, which was almost 60pc less than its peak in 2013, at the end of the financial crisis.

The Exchequer’s strong fiscal position, buoyed by bumper amounts of corporation tax, meant that the NTMA could reduce the number of bonds issued at higher yields.

Average annual bond issuance between 2019 and 2021 was almost €20bn, which dipped to less than €7bn between 2022 and 2024. Last year it fell to €6bn.

The bond issuance in 2024 was at a weighted average yield of 2.7pc. The weighted average yield of issuance so far this year has been 3.07pc.