Bloomberg News

Ireland Says 2010 Debt Was $4.9 Billion Less After Finding Error

November 01, 2011

(Updates with comment from economist in third paragraph.)

Nov. 1 (Bloomberg) -- Ireland said its 2010 debt was 3.6 billion euros ($4.9 billion) lower than previously estimated after it discovered an error in its accounts for the year.

A change in the relationship between the National Treasury Management Agency and the country’s Housing Finance Agency resulted in a double count of some figures, the finance ministry in Dublin said today. It said it was recently informed of the oversight, which lowers debt by the equivalent of 2.3 percent of gross domestic product. The error was spotted as part of the ministry’s preparation of budgetary projections scheduled to be released Nov. 4, the ministry said.

Ireland’s debt-to-gross domestic product may peak at 114 percent rather than 117 percent because of the change, according to Dublin-based Goodbody Stockbrokers. The improvement is welcome as Ireland is “at the edge of debt sustainability- unsustainability” Chief Economist Dermot O’Leary said in a note.

Ireland, which received an 85 billion-euro rescue package last year, is targeting at least 3.6 billion euros in savings in 2012 to reduce its budget deficit. Government debt is forecast to be 173 billion euros, or 111 percent of GDP, by the end of this year, according to projections on the NTMA website.

The NTMA said it raised the issue of potential double- counting of some government debt with the finance ministry as far back as a year ago.

“The Department of Finance is responsible for the calculation of general government debt,” an NTMA spokesman said in an e-mailed response to questions. “The NTMA raised the issue with the Department of Finance on a number of occasions as far back as autumn 2010.”

--With assistance from Joe Brennan in Dublin. Editors: Fergal O’Brien, Leon Mangasarian

To contact the reporter on this story: Finbarr Flynn in Dublin at fflynn3@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net


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