The near collapse of the Irish economy should be an important lesson to us in the UK. The main reason for the Irish crisis was not the level of public debt alone. Irelands public debt in 2009 was $42 billion or 57.7% of GDP, ranked 36 in the world. In comparison UK public debt in 2009 was 68.10% of GDP, 22 in world ranking.
Irelands biggest problem it seems, is the total level of its external debts. External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the IMF and World Bank.
In 2009 Irelands external debts stood at a stagering $2,287,000,000,000, or 1004% of GDP, or $515,671 for every Irish citizen. This together with other factors bought about a lack of confidence in Irelands ability to service its debts; hence lowering its credit rating and increasing the cost of borrowing money.
We should not be complacent either, our external debts in 2009 according to the CIA stood at $9,088,000,000,000, or 416% of GDP or $147,060 per capita. We are ranked fifth in the world (external debt as a percentage of GDP).
Irelands biggest problem it seems, is the total level of its external debts. External debt (or foreign debt) is that part of the total debt in a country that is owed to creditors outside the country. The debtors can be the government, corporations or private households. The debt includes money owed to private commercial banks, other governments, or international financial institutions such as the IMF and World Bank.
In 2009 Irelands external debts stood at a stagering $2,287,000,000,000, or 1004% of GDP, or $515,671 for every Irish citizen. This together with other factors bought about a lack of confidence in Irelands ability to service its debts; hence lowering its credit rating and increasing the cost of borrowing money.
We should not be complacent either, our external debts in 2009 according to the CIA stood at $9,088,000,000,000, or 416% of GDP or $147,060 per capita. We are ranked fifth in the world (external debt as a percentage of GDP).
1 comment:
Thank you.
Another good statistical analysis AT.
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