The State's national debt now stands at €44,000 per person in the country, one of the highest per capita debt burdens in the world.
The Department of Finance published figures on Friday which show the State's public debt increased to €226 billion at the end of last year.
This is up 11 per cent from €203 billion before the Covid-19 pandemic, when the debt per capita stood at €41,300.
The national debt now stands at 86 per cent of the country's gross national income, which is down from pre-pandemic levels.
On Friday, the Department of Finance published its sixth annual report on public debt, which found the State's level of indebtedness remains high.
It warned of “significant risks” to the public finances in the years ahead, with both immediate and medium-term challenges pressuring the State’s fiscal position, and “clear vulnerabilities” due to dependence on corporation tax.
Minister for Finance Michael McGrath said the increase in public indebtedness was “unavoidable” due to the pandemic, and warned of the challenges the country faces that will result in “large costs”.
“The war in Ukraine and the associated energy price shock have induced a cost-of-living crisis, placing renewed pressure on the State’s fiscal position,” he said.
“We face these challenges with elevated debt levels; Ireland continues to have one of the highest per capita debt ratios in the developed world.
“Several structural features of Ireland’s debt, with the majority of debt locked in at fixed prices and relatively long maturities, insulate us somewhat from the changing interest rate environment brought about by these shocks.
“Nevertheless, the re-financing of our existing debt over the medium-term will most likely lead to increased debt servicing costs, the first call on the public finances.
“Looking ahead, Government is also aware of the major challenges on the horizon. The need to finance an ambitious infrastructural plan, as well as shifting demographics and the transition of economic activity to carbon-neutrality, will impose large costs on the public finances.
“Additionally, the public finances are vulnerable to a shock to corporation tax receipts or to the multinational sector in Ireland generally, which could potentially result in a very large deficit.”
“It is essential that the public finances stand ready to deal with these challenges. This report underlines the need for prudent management of debt and the re-building of our fiscal buffers.
“Government is committed to cultivating a dynamic and sustainable economy, while ensuring our ability to meet the fiscal challenges that lay before and ahead of us.”