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Irish Finance Minister Michael Noonan Photo by: REUTERS

Ireland is $5 billion richer - government finds cash after accounting error

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Irish Finance Minister Michael Noonan Photo by: REUTERS

It seems incredible that this could happen but Ireland's finances are 3.6 billion euros better off thanks to an accounting error.

Yesterday it was revealed that the country's government debt is actually 2.3% lower when it was discovered that a payment between state agencies had been double counted. Ireland's Department of Finace was first out of the gate with news of the unexpected windfall.

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In a statement to the press the department of finance said: 'Previously, the National Treasury Management Agency (NTMA) acted as agents for the Housing Finance Agency (HFA).

'Since late 2010 the NTMA have loaned directly to the HFA. These loans appear as assets in the NTMA accounts and liabilities in the HFA accounts.

'The liabilities of the HFA are included in general government debt; the corresponding assets of the NTMA have been included in the 'liquid assets' of the NTMA, which are also part general government debt - effectively a double count,' the statement continued.

'Removing this double count reduces the estimate of 2010 general government debt by 3.6 billion euros or 2.3% of GDP,' the statement concluded.

On Friday the Irish government will publish its financial plan for the next three years.

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