SVG’s public debt stands at $1.23b

Management of the public debt of St. Vincent and the Grenadines, which now stands at $1.23 billion, will remain a focus of the Ministry of Finance.{{more}}

To this end, a Debt Management Strategy covering the period 2010 to 2013, which outlines the debt management objectives and principles of the government, has been prepared to guide this process.

Prime Minister and Minister of Finance Dr. Ralph Gonsalves made the disclosure while making his Budget address on Monday, and said in addition to the strategy, the Debt Management Unit (DMU) within the Ministry of Finance will continue to be strengthened to provide efficient management of the public debt.

The public debit as at September 2010 comprises $653.2 million in external debt and $588.9 million in domestic debt. This represents a 3.8 per cent increase when compared with September 2009.

The increase in the total debt, the Prime Minister said, was due to a 10.9 per cent increase in the external debt primarily because of a drawdown of $71.5 million from the ALBA Bank for various pubilc sector development projects.

He said there were also sizeable drawdowns on loans from the Caribbean Development Bank (CDB).

Of the external debt, $542.7 million or 83.2 per cent was attributable to Central Government, while $110.5 million or 16.6 per cent to public enterprises. The CDB continues to be the largest creditor, with $271.0 million or 41.5 per cent of the external debt. This was followed by bondholders with $134.0 million, IBRD/IDA – $76.9 million and the ALBA $71.5 million.

The public debt as at September 2010 amounted to 63.6 per cent of GDP as compared with 62.8 per cent of GDP at September 2009. This ratio, the Prime Minister said, is based on the new rebased GDP series which is now in official use throughout the ECCU. Using this new series, the level of GDP has expanded significantly, and GDP in current market prices is now significantly higher than in the previous series, he explained.

Resultantly, he said, the debt to GDP ratio has been reduced from the levels previously reported.

The Prime Minister pointed out that the total provisions for debt servicing in 2011 are much lower than those in 2010. He said there were several factors which contributed to this, including the refinancing of $100 million of high cost domestic debt, with a concessionary loan from the CDB; the removal of some provisions in the 2010 Estimates for servicing of debts which are no longer needed, including the Financial Stabilization Loan and the suppliers credit for the Coast Guard; and a favourable exchange rate movement which has reduced debt servicing cost for non-US dollar debt.