Financing the deficit - general government debt 56.0% of GDP at end 2021

General government gross debt (the level of government borrowing) rose by almost €18 billion to €235.9 billion (Table 3.1). Since 2019 the level of debt has increased by nearly €32 billion. In contrast with the increase in the nominal value, the debt to GDP ratio has decreased from 58.4% last year to 56% this year, thus remaining below the Stability and Growth Pact threshold of 60%. This is due to the performance of GDP in the year.

General government net debt rose by €6.8 billion to €192.6 billion (45.7% of GDP) at the end of 2021. Net debt takes account of the assets corresponding to Excessive Deficit Procedure (EDP) debt instruments, i.e. currency and deposits, securities other than shares, and loans (Tables 3.1 and 3.4).

The market value of total liabilities rose by €5.8billion during 2021 compared with its end-2020 value of €267.6 billion. This was driven by a combination of increases in the market value of F.3 - Debt Securities of €1.4 billion and F.4 – Loans of €2.0 billion (Table 3.3). The net increase in loan liabilities was largely as a result of the State drawing down €2.5 billion in finance under the SURE facility during Q1 2021. The SURE scheme is an EU initiative designed to offer support to EU member states in their efforts to offset the negative social and economic impacts of the coronavirus outbreak.

Movements of note in the balance sheet

At the end of 2021 the value of the State's assets in Equity and Investment Fund Shares (AF.5, Table 3.3) stood at €34.2 billion, representing a year-on-year rise of €0.2 billion since Q4 2020. This growth in value was driven by the combination of a reduction in holdings in this asset class of €1.0 billion (Table 3.2) and an increase in the value of these holdings of €1.2 billion.

On the other side of the balance sheet the market value of the State's liabilities grew by €5.8 billion in 2021 to stand at €273.4 billion at year-end. This movement in valuation is explained by Net transactions of €18.1 billion, dominated largely by the issuance of €13.7 billion in Government bonds, which were then offset by downward market valuations of €12.3 billion (Tables 3.2 and 3.3). Investment, largely by households, in small saving schemes continued in 2021 as the value of the State’s liabilities through these products grew by €1.3 billion since end-2020.