The agency which borrows money on behalf of Ireland has told the international markets that the country's deficit is likely to rise as a result of bailing out the banks.
Earlier this week the ESRI said that including the recapitalisation of Anglo Irish and Irish Nationwide would bring Ireland's deficit to almost 20%, the highest in the developed world, if included in the national accounts.
John Corrigan, chief executive of the National Treasury Management Agency said 'we flagged the possibility the deficit could rise as a consequence of investment in the banks'.
Mr Corrigan said international investors were 'comfortable' with that as it would be a once-off cost.
The NTMA said it had raised €15 billion in long-term bond funding in the six months to the end of June and, as a result, was beginning the second half in a very strong funding position.
Read the NTMA annual report here
It said more than 80% of the planned €20 billion borrowing target for 2010 had already been raised. It said the Exchequer was 'fully funded' to meet its need through the first quarter of 2011.
