(Adds breakdown of bank bailout financing)
By Andras Gergely
DUBLIN, Dec 31 (Reuters) - Ireland is likely to issue at least 1.5 billion euros more debt in 2009 than the 18.4 billion earlier projected due to a bank bailout and a faltering economy, the National Treasury Management Agency said on Wednesday.
The NTMA said in October it was seeking to raise a total 18.4 billion euros ($25.74 billion) through a combination of syndicated bond issues and auctions next year, to cover the government's 2009 borrowing requirement and bonds falling for repayment.
"Other factors, such as a further decline in economic growth and the recently announced bank recapitalisation programme, may result in a higher borrowing figure," it said.
"The 18.4 billion is a floor which could be exceeded, by how much, we don't know at this stage," NTMA Chief Executive Michael Somers told reporters. "We're probably somewhere in the low 20s (billions) in the amount of cash we have to raise next year to meet the exchequer's needs."
The government said earlier this month it would inject 5.5 billion euros ($7.70 billion) into the country's three biggest lenders and move to take majority ownership of the weakest one.
Of the bank bailout, 4 billion will be financed from the national pensions reserve fund, originally set up to cover welfare and pension costs from 2025 onwards, with the remaining 1.5 billion to be borrowed by the exchequer, the NTMA said.
Ireland was the first euro zone country to slip into recession this year and despite a surprise rebound in the third quarter the government has forecast that the economy would shrink between 3 to 4 percent in 2009.
The government has also projected a budget deficit of 7.25 percent of GDP next year, more than twice the 3-percent limit allowed by the European Union.
NATIONAL DEBT
The NTMA said it would hold a series of bond auctions in 2009, to be announced at the beginning of each quarter, with the possibility of additional extraordinary auctions depending on demand, said the NTMA, the asset and liability management arm of the Irish government.
"Bonds will be auctioned so as to achieve a target size of 8 billion euros to 10 billion euros for each bond," the NTMA said.
Ireland's national debt, calculated net of exchequer cash balances, increased to 50.7 billion euros or 32.5 percent of gross national product (GNP) at the end of 2008 from 23.3 percent a year ago.
General Government Debt, used for comparisons in the EU, rose to 41.3 percent of gross domestic product (GDP) from 24.8 percent at the end of 2007, the NTMA said.
The 2009 budget projected a rise in the government debt/GDP ratio over the 2009-2011 period, with a peak at 47.8 percent, the NTMA said.
Ireland's exchequer borrowing requirement for 2008, originally forecast at just under 5 billion euros, is now seen around 13 billion euros, the NTMA said.
The value of the investments of Ireland's National Pensions Reserve Fund, which the government plans to tap for the bank bailout, fell by 29.5 percent in 2008, giving it a market value of 16.4 billion euros, the NTMA said. (Editing by Tony Austin and Andy Bruce)