SVG’s public debt increases in the aftermath of La Soufrière eruptions, Covid-19

By Admin. Updated 12:30 p.m., Friday, December 16, 2022, Atlantic Standard Time (GMT-4).

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As at September 30th 2022, the total public debt amounted two billion and one hundred and sixty-six-million, five hundred and sixty thousand, eight-hundred and two dollars ($2,166,560,802).

This figure is 4.1 percent more than the total disbursed outstanding public debt for the comparative period in 2021.

The total public debt is split into two parts – the Domestic Debt and the External Debt.

Since the COVID-19 pandemic and the explosive eruptions of the La Soufrière volcano, the government has had to increase borrowing to meet the increase spending needs to provide social relief to the nation’s most vulnerable.

Both the domestic debt and the external debt increased.

According to the 2023 Estimates of Revenue and Expenditure passed in the House of Assembly on December 13, 2022, the total Domestic Debt which amounted to $555.0million as at September 30th 2022 increased by 6.3percent or $32.8 million when compared with the domestic debt for the same period in 2021.

The external debt for the period stood at $1.611 billion, anincrease of 3.4 percent or $53.3 million whencompared with the external debt as at September 30th, 2021.

The main changes within the domestic debt portfolio over the period are as follows:

1. The balance outstanding on Overdrafts owed by the public sector increased by $17.6 million or 33.8 percent. The Local Loans portfolio fell by 9.2 percent or $10.6 million, as a result of amortization on a number of loans during the period.

2. Total Government Bonds and Notes issued and outstanding over the period increased by $51.8million or 19.9 percent.

As at September 30th 2022, there was an increase in the external debt by $53.3 million or 3.4 percentwhen compared to 2021.  The main driversaccounting for this change in the external indebtedness of the Government are the following;

Caribbean Development Bank

Port Modernisation Project​​​​​​​$69.4 m

Safety Nets for Vulnerable Population affected by COVID19 ​$16.1 m

School Improvement Project Phase I​​​​​$11.9 m

NDM Disaster Risk Reduction & Climate Change Adaptation​​$3.7 m

TECH VOC Education & Training Development​​​​$7.3 m

World Bank/IDA

Volcano Eruption Emergency Response Project (VEEP)​​$30.9 m

Caribbean Regional Digital Transformation Project​​​$4.5 m

OECS Regional Health Project​​​​​​​$4.3 m

Human Development Service Delivery Project ​​​​$4.4 m

Republic of China (on Taiwan) ROC

Modern High Court Project $6.8 m

Hotel Development Project ​​​​​​​$10.8 m

CARICOM Development Fund

Country Assistance Programme II (Hotel Development)​​$3.4

Notwithstanding the above, net repayments wererecorded on a number of external loans during the period. Some of the more significant ones are:

a. $4.8 million repaid on some IMF loans; 

b. $6.8 million repaid on ROC loans;

c. $11.8 million repaid on loans owed to the ALBA

d. $1.6 million paid on loans from CARICOM Development Fund (CDF)

e. $5.9 million paid on World Bank/IDA loans

The Public Debt as at September 30th 2022 is comprised as follows:

Type of Debt

Amount

%  of total

Domestic debt is $ 555.0 million and is 25.6 % of the country’s total debt.

External debt stands at $ 1 billion 611.5 million dollars and makes up 74.4 % of the country’s total public debt.

The total public debt is 2 billion, 166.6 million dollars.

Total debt service for 2023 is estimated at $282.9million or 37.2 percent of the Current Revenue.

The Debt Service requirements for 2023 are made up of:

​​Interest Payments​​$ 80.3 m

​​Amortization​​​$180.6 m

​​Sinking Fund Contributions​$ 22.0 m

Total $282.9 m

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