Government Finance Statistics Quarter 2 2023

Financing the deficit - general government debt at €222.9 billion at end of Q2 2023

Gross general government debt decreased by €0.7 billion in the quarter to €222.9 billion. This was accounted for almost entirely by the movement in debt securities (redemptions of €848 million in short term and net issuance of €275 million in long term securities). During the quarter the Government bought back and cancelled €1 billion of the Irish Floating Rate Treasury Bond. These bonds, which were issued in connection with the Irish Bank Resolution Act 2013, had been held by the Central Bank of Ireland. At the end of the quarter €0.5 billion of these bonds remain. There were minor changes in the other debt categories with currency and deposits rising by €71 million and loans falling by €154 million. The debt to GDP ratio stood at 43.1% at the end of the second quarter.

EDP debt instrument assets increased by €2.3 billion in the quarter which, when combined with the fall in debt liabilities, resulted in net general government debt decreasing by €3.0 billion (Tables 3.1 & 3.2). The growth in assets is largely due to increases in short-term debt securities of €2.3 billion and loans of €63 million.

Figure 3.1 above shows that the composition of general government debt remains relatively stable over time. In Q2 2023 securities accounted for over 66% of the total. Long term securities made up almost the entire total, with short term securities accounting for less than 1%.

Movements of note in the balance sheet, Q2 2023

The market value of the State's assets in Equity and Investment Fund Shares (AF.5, Table 3.3) stood at €33.0 billion at the end of Q2 2023, representing a fall of €1.8 billion in the quarter. This relatively small drop in value was composed of two offsetting movements –net disposals of these assets of €2.4 billion (AF.5, Table 3.2), together with unrealised holding gains of €0.6 billion. The net disposals during the quarter is due largely to a combination of further sale of shares held by the State in AIB and Permanent TSB, together with a withdrawal of equity from the Central Bank.

Net investment into small savings schemes, predominantly by households, continued during Q2 as the State’s liability from these schemes grew by a further €71 million. This represents a quarter-on-quarter drop of €63 million in the level of quarterly investment into these savings products. Moreover, in comparison to the level of investment occurring in the first quarter of 2022 it represents a reduction of €148 million.

The market value of total liabilities (AF.L, Table 3.3) fell by €1.7 billion in the quarter and stood at €233.3 billion at the end of Q2 2023. This change in value was mainly composed of the following combination of movements – net redemption of both short and long-term bonds (AF.3, €1.0 billion), net repayment of loans (AF.4, €0.4 billion), and holding losses on the long-term securities of €0.4 billion.