In 11 years, Ireland's external debt has risen by $2,276 billion

the_dark_side

I was just reading this last night, and I find the figures staggering. I was looking at the CIA Factbook from 2009..you have to scroll down towards the bottom of the page to get the figure...

Ireland's external debt 2009: $2.287 trillion link

Ireland's external debt 1998: $11 billion link

So in 11 years, our external debt has risen by $2,276 billion

How the hell??

mikemac

2009 link doesn't work?

the_dark_side

sorry, it should be working now

Lukker-

We dun' goofed.

RichardAnd

I once heard that if you add up all the debt all over the world, you'll find that the total is considerably higher than total amount of money.

Cookie_Monster

RichardAnd wrote: »

I once heard that if you add up all the debt all over the world, you'll find that the total is considerably higher than total amount of money.

You need to include the Bank of Mars for it to even out :pac:

johnnyjb

RichardAnd wrote: »

I once heard that if you add up all the debt all over the world, you'll find that the total is considerably higher than total amount of money.

Im no financial wizard but thats because of interest. You just have to make sure you dont get caught and go belly up financially.

Personally im in debt but not "repossesed" by the bank or in prison.

the_dark_side

yep... but it must be one hell of an interest rate for Ireland's external debt to go from

11,000,000,000 .......to...... 2,287,000,000,000

in 11 years!

(just so that the figures can be read clearly)

Im still trying to get my head around that amount of money, especially when you consider that we only have a work-force of 2 million people.... I think?


external debt, 2009:______________2,287,000,000,000
work-force:_____________________________2,000,000

liammur

the_dark_side wrote: »

yep... but it must be one hell of an interest rate for Ireland's external debt to go from

11,000,000,000 .......to...... 2,287,000,000,000

in 11 years!

(just so that the figures can be read clearly)

Im still trying to get my head around that amount of money, especially when you consider that we only have a work-force of 2 million people.... I think?


external debt, 2009:______________2,287,000,000,000
work-force:_____________________________2,000,000

Well done bertie ahern.

sealgaire

.

seamus

Debt - External
This entry gives the total public and private debt owed to nonresidents repayable in internationally accepted currencies, goods, or services. These figures are calculated on an exchange rate basis, i.e., not in purchasing power parity (PPP) terms.

So that figure includes all of the debt owed by Irish people and Irish companies to foreign companies. When you consider the rate of lending which took place between 1998 and 2009 - particularly to investors, developers and businesses - you'll find that the vast bulk of that external debt is held by private companies and not by individuals or the government.

When you consider that the combined loan books of AIB and BOI are worth about $0.5 trillion and practically all of that is owed by those banks to foreign lenders, you can see how easily the figures stack up.

Scofflaw

That figure is our gross external debt only, though - our foreign liabilities, or what the rest of the world is owed by Ireland. We also have a lot of foreign assets, though - owed to Ireland by the rest of the world, or owned by Irish people and businesses.

The difference between the two is Ireland's IIP ("international investment position"):

At 31March 2010, Ireland’s quarterly international investment position (IIP) results show overall stocks of foreign financial assets of €2,384bn – an increase of almost €117bn on the end-December 2009 level (€2,267bn). The corresponding overall stocks of foreign financial liabilities of €2,514bn at end-March 2010 were up €137bn on the end-December 2009 level (€2,377bn). Irish residents therefore had an overall net foreign liability of almost €130bn at 31March 2010, an increase of €20bn on the previous quarter’s figure of almost €110bn– see Table 2.

Source

Debt of €2,514bn, assets of €2,384bn - our net debt, then, stands at €130bn. That's still a lot of money when you look at a workforce of 2 million, but that's partly because workforce is the wrong measure of comparison. The vast majority of that external debt is owed by companies, not individuals, households, or the taxpayer, and the correct measure with companies is turnover - nobody asks how big a company's debt is in comparison to its workforce.

To answer the OP question, though - the reason our gross external debt is so vastly increased compared to 1998 is because the financial transactions through our economy have increased enormously.

Obviously, that's not to say there isn't a lot of household and government debt in Ireland - only that gross external debt isn't a good measure of it - if anything, gross external debt is a measure of the extent to which Ireland is internationally economically active.

cordially,
Scofflaw

the_dark_side

thanks for the explanation.. but the CSO report lists Irelands Gross External Debt at Sept 30, 2009 as being 1.63 trillion...
this figure conflicts with the figure in the CIA Factbook, Sept 30th, 2009 of 2.28 trillion gross external debt... how is it that CIA are so far out?
cheers

Économiste Monétaire

the_dark_side wrote: »

thanks for the explanation.. but the CSO report lists Irelands Gross External Debt at Sept 30, 2009 as being 1.63 trillion...
this figure conflicts with the figure in the CIA Factbook, Sept 30th, 2009 of 2.28 trillion gross external debt... how is it that CIA are so far out?
cheers

The CSO figure is in Euro, the CIA figure is in U.S. Dollars.

Liberalbrehon

the_dark_side wrote: »

thanks for the explanation.. but the CSO report lists Irelands Gross External Debt at Sept 30, 2009 as being 1.63 trillion...
this figure conflicts with the figure in the CIA Factbook, Sept 30th, 2009 of 2.28 trillion gross external debt... how is it that CIA are so far out?
cheers

Iraq, WMD, it's not like the CIA is ever wrong

ei.sdraob

courtesy of 2pack from the pin

In 2007 the Irish Government owed under 30% of GDP and around 30% of GNP and since then the debt has inexorably risen.

Today GNP is around €140bn and falling
Today GDP is around €160bn and static
Today Government debt ( ex Nama) is €90bn and rising
Today Government Debt ( including Nama) is around €103bn and rising

GNP is falling at a rate of 10% per annum and will be under €130bn by the end of 2011

At the end of 2011 Government debt ( ex Nama) will be €110bn and rising
At the end of 2011 Government debt ( including Nama) will be at least €130bn and rising

All of this excludes any further bank recapitalisations to those such as INBS or AIB who will be around with the bucket long before end 2011. Anglo is also excluded. I have no idea what that POS will cost us

All of this excludes the following.

Today the Irish Consumer owes €150bn on Mortgages or 116% of GNP

By end of 2011 the total debt held by the Irish consumer on Mortgages and the Total debt of the Irish Government, ADDED TOGETHER will be at least 225% of GNP and Possibly 250% of GNP.

In 1987 the sum total of Mortgage Debt and Government Debt Together NEVER Exceeded 150% of GNP.

:eek: :mad:

the_dark_side

Économiste Monétaire wrote: »

The CSO figure is in Euro, the CIA figure is in U.S. Dollars.

oops! I didn't fully understand the situation anyway, until I read Scofflaw's post... its easy to get carried away in the current whirlpool of negative media commentary

blackhorse139

i'm sure its just a CIA mistake considering the same page says that we are in dispute with Denmark over the ownership of The Faroe Islands

Joe1919

RichardAnd wrote: »

I once heard that if you add up all the debt all over the world, you'll find that the total is considerably higher than total amount of money.

That because of the money multipler effect where the same money is loaned onwards several times etc.
e.g. http://www.colorado.edu/Economics/courses/econ2020/section10/section10.html

the_dark_side

blackhorse139 wrote: »

i'm sure its just a CIA mistake considering the same page says that we are in dispute with Denmark over the ownership of The Faroe Islands

this is why we sent Brian Kerr to manage their soccer team

seamus

blackhorse139 wrote: »

i'm sure its just a CIA mistake considering the same page says that we are in dispute with Denmark over the ownership of The Faroe Islands

We are. Well not the Faroe Islands, but this thing, which is about half the size of O'Connell Bridge. So just big enough to land a helicopter on and build a small cottage. Of course, it's a rock exposed to the elements, so you could probably land on it maybe five times a year and you'd have to rebuild your cottage every time you do.

Still a better investment for government money than Anglo though.