Ireland faces €6 billion annual debt-service bill as bond yields surge

The Economic and Social Research Institute cautions that the recent surge in global bond yields could force Ireland’s annual interest outlays on sovereign debt to exceed €6 billion by 2030, up from €3 billion in the previous year. The institute’s April projection may underestimate the increase if current yield trends become entrenched. Irish 10-year government bond yields have risen from 3.2% to 3.7%, with similar hikes seen in France (4.7%), the United States (5.2%) and the United Kingdom (5.4%).

The ESRI notes that higher borrowing costs erode fiscal space over time, even though the debt-to-GDP ratio has been falling. Competition from corporate AI-related bond issuances by firms such as Google and Meta is adding pressure to the sovereign market. Despite these challenges, the institute expects modest economic growth and warns that inflation and energy price shocks will keep household costs high.