Minister for Finance Brian Cowen has downplayed fears that personal borrowing is growing too quickly. Speaking yesterday at the launch of the Annual Report of the National Treasury Management Agency (NTMA) the minister said that the burden of Ireland's public debt levels continues to fall.

On Tuesday, Central Bank Governor John Hurley raised concerns about the growth in personal borrowing to levels exceeding 120 per cent of personal disposable income. Commenting on growing levels of personal indebtedness, Mr Cowen said that it reflected greater confidence in prospects for the economy, low interest rates and an expanding range of opportunities at home and abroad.

"People now have the opportunity to make investments for a higher standard of living", said Mr Cowen. Ireland's increasing level of personal debt reflected rapid development of the economy as well as the impact of a young and growing population, said Mr Cowen.

Dr. Somers said that he agreed with the Minister and noted that Irish government finances were in a good position to able to respond to global economic pressures.

Ireland's public debt now stands at €37.8 billion. Interest payments on this debt amounted to €1.7 billion for the full year. Mr Cowen noted that this figure amounted to just 4 per cent of tax revenues and praised the record of the NTMA in the efficient management of the government's funding activities.

In response to a question about yesterday's proposal by the Irish Congress of Trade Unions to involve the NTMA in the funding of semi-state companies, Dr Somers declined to express an official position.

"This is a very political question. It has been raised before by Ictu, not due to prompting on our part. We do what we are told and it is a matter for the government to decide". Ictu have proposed that the NTMA would contribute to raising investment in semi-state companies by managing a shareholding company in conjunction with social partners, the department of finance and private pension funds.

The NTMA also published the annual report of the National Pensions Reserve Fund Commission. It revealed the fund grew by 7.9 per cent in the first half of this year, boosted by the strong performance of its European equity investments. The fund, which was created to help finance Ireland's pension costs from 2025, is now valued at €13.3 billion.

The commission said the fund earned a return of 9.3 per cent in 2004, equal to €951 million, as it benefited from a decision to diversify its investments. Some €200 million has already been committed to international property, €75 million to private equity and €120 million to commodities.

"The overall aim of the diversification exercise is to increase the fund's potential return without substantially altering its risk profile," said Donal Geaney, the commission's chairman. By the end of 2009, the commission aims to invest 8 per cent of the fund in both property and private equity, equal to about €2 billion in each asset class, he said.