(Limerick East) asked the Minister for Finance the total national debt on 1 January, 1988; the cost of servicing this debt in 1987; the proportion of the debt which is domestic and foreign; in respect of foreign debt, the currencies in which it is borrowed; and if he will make a statement on the matter.

49.

(Limerick East) asked the Minister for Finance the estimated total of the national debt for the year ending 31 December, 1988; the estimated cost of servicing this debt; and if he will make a statement on the matter.

I propose to take together Questions Nos. 15 and 49 which is a priority question.

The national debt as of 31 December 1987 is provisionally estimated at £26,345 million, comprising £16,649 million of domestic debt and £9,696 million of foreign debt. I have set out in a table, which I will circulate in the Official Report, details of the currency composition of the foreign debt as of 31 December 1987. In accordance with normal practice I do not propose to publish a forecast of the national debt as at the end of 1988.

The estimated cost of servicing the national debt charged on Central Fund services in 1988 is £2,173 million and the comparable figure for 1987 was £2,091 million.

The debt — GNP ratio at the end of 1987 is estimated to have been 151.6 per cent, as compared with 150.7 per cent at the end of 1986. This increase is only a small fraction of the rate of increase in recent years and reflects the considerable progress already made in restoring balance to the public finances. For example, during the five year period ending on 31 December 1986 the debt/GNP ratio grew at an annual average rate of over 11 percentage points.

Similarly, the estimated rate of increase in the cost of servicing the national debt in 1988 is one of the smallest for many years. Debt service payments, however, still constitute a heavy drain on the public finances and in 1988 will be the equivalent of 12.2 per cent of GNP as compared with 6.4 per cent ten years ago. As a result there is no alternative to continuing with the present policy of reducing Exchequer spending and borrowing.

TABLE

Exchequer Foreign Debt at 31 December 1987

(Limerick East): May I ask the Minister if he has in his brief the projected figure for the debt as a percentage of GNP for end 1988?

No, we do not forecast.

(Limerick East): You did a lot of forecasting here a short time ago.

When you were on this side of the House you forecast doom and gloom.

And a lot of other things as well.

We were accused of doing the opposite.

(Limerick East): I should like to thank the Minister for a very full answer. Can I take it that all these figures are based on the old method of computing the debt, that the elimination of the double counting and the Local Loans Fund will be signalled to us and we will be informed of the new basis?

Yes. I will give the Deputy a tabular statement in relation to the breakdown of the debt. I have this information; nobody is trying in any way to keep from the House or the public the position that will pertain after the Local Loans Fund issue. I will take the figures for 1985 and 1986. It was 150.7 per cent of GNP at the end of 1986 and 133.2 per cent of GNP at the end of 1985. As I said in my reply, that was up to 151.6 per cent at the end of 1987. Adjusted for changes in the Local Loans Fund, for 1985 the figure goes from 133.2 per cent down to 123 per cent and the 150.7 per cent becomes 139.6 per cent.

The time has now come to deal with questions nominated for priority.

(Limerick East): Since one of these questions is a priority, may I ask the Minister a final supplementary?

Certainly, Deputy.

(Limerick East): May I ask the Minister if it is his intention to proceed with further corrections in the tables computing the national debt or has he finished the elimination of double counting with the introduction of the Local Loans Fund Bill?

No. When the Local Loans Fund Bill was going through the Dáil, and as I said earlier in reply to the Deputy and to Deputy Bruton, other prospects that are being examined are at an advanced stage of examination for any way double counting might be seen and if we find such, I will do my utmost to have them published in the report for 1987 which will be out at the end of June.

(Limerick East): The Minister has provided me with figures on the composition of the foreign element of the national debt in the various currencies in which it is held. May I ask him if that information reveals any particular policy?

What does the Deputy mean by policy?

(Limerick East): Is there any current policy of switching it into one currency rather than another?

Are you speculating on the international money markets?

No, there is a very efficient unit in the Department of Finance dealing with all these matters. They have done great work during recent years and are continuing that during 1988. All the tabular statement will give is the exact amounts in each currency.