The cost paying the interest bill on Ireland’s national debt is expected to double from €3 billion to €6 billion by 2030.
The National Treasury Management Agency, the body which manages the country’s €210 billion borrowings, said the era of record low interest rates was over and the country would face higher debt servicing costs in future.
“The benefits of our strategy of borrowing at low rates for long terms continue to recede and the stock of debt is projected to increase to close to a quarter of a trillion euro,” NTMA’s chief executive Frank O’Connor said.
He added that Ireland was in a “strong position” to manage the projected increase interest on the national debt.
But he warned that the country’s debt level and its position as a small, open economy which is exposed to global developments “mean was cannot take this for granted.”
Last year the NTMA borrowed €8.5 billion, a rise of €2.5 billion on 2024, at an average interest rate of 3.08%.
Over a third of the money raised was from the sale of 30-year bonds at a yield of 3.15%.
Last year the national debt fell for the fourth year in a row to €210 billion.
The average interest rate on the stock of debt remained “broadly stable” at 1.5%.
The NTMA said Ireland’s national debt has one of the longest maturities in Europe.
So far this year it has borrowed €8.25 billion and plans to borrow a total of between €10 billion and €14 billion in 2026.
The NTMA is also managing two long term savings funds set up by the Government for future infrastructural spending.
It said the funds are on course to have over €23 billion by the end of the year.
It added each fund earned an investment return of 2.2% last year as part of a low risk strategy for both funds.
Last month the Irish Fiscal Advisory Council criticised the Government for planning to borrow money to meet future payments into the funds and Central Bank Governor Gabrial Makhlouf agreed in a radio interview that it did not make sense.
Tánaiste and Minister for Finance Simon Harris said: “It was possible we will have to borrow money for the funds but it depends on the level of surplus that the country runs.”
He added the Government had legislated for the payments into the funds and it was not up to the Government to decide “on a whim” whether to make a payment or not.
Mr O’Connor said the markets viewed the two funds favourably and the initial payments to the funds came from budget surpluses.
He said the commitment to set aside money to finance infrastructural spending “resonated well” with the market.
He added any borrowing would still be far below requirements after the financial crisis when Ireland was raising in excess of €20 billion from the bond market annually.
