debt increase$

iF this country’s debt were to be divided equally among the population, then each of us now owes approximately $102,000.

The Central Bank in its Annual Economic Survey 2022, which was publsihed last week, stated that this country’s General Government debt stood at $139.4 billion at the end of last September.

This was an increase from the $137.2 billion recorded at the end of September 2021.

According to the Central statistical office, at the end of June 30 last year this country’s population was estimated to be 1,365,805 people.

Despite the $2.2 billion increase in the general government debt between the two fiscal years however, the Central Bank stated that the debt as a share of the country’s gross domestic product fell from 86.1 per cent to 71.5 per cent of GDP over the same period.

“Adjusted General Government debt (which excludes sterilised debt) increased by 2.4 per cent to reach $129.7 billion (66.5 per cent of GDP) at the end of September 2022 compared to $126.7 billion (79.5 per cent of GDP) at the end of September 2021. This compares with an average annual increase of 12.6 per cent during the previous two fiscal years at the height of the Covid-19 pandemic,” the Central Bank stated.

The Annual Economic Survey 2022 stated that Central Government domestic debt outstanding rose by 2.7 per cent or $1.8 billion over the 12-month period to reach $66.2 billion at the end of September 2022.

“This increase in domestic debt resulted from borrowings outstripping repayments over the 12-month period. However, new Central Government borrowings of $4.6 billion on the domestic capital market in FY2021/22 were significantly less than the $13.3 billion contracted in FY2020/2118,” it stated.

The new borrowings last year comprised mainly of three bonds with multiple tranches issued at an average interest rate of 5.0 per cent and an average tenor of 12 years.

“The bonds were private placements arranged by First Citizens Bank and Republic Bank Ltd. In addition, other disbursements to the Central Government included $1 billion from a bond contracted in the previous fiscal year, $140 million from an ongoing Build-Own-Lease-Transfer (BOLT) facility for the construction of the Ministry of Health Administrative Building and additional Debt Management Bills of $500 million,” it stated.

“With the inclusion of new borrowings, Debt Management Bills outstanding increased to $6.6 billion at the end of September 2022, representing 94.8 per cent of the statutory limit. Overall, the proceeds were used for budget support ($5.8 billion) and debt refinancing ($3.2 billion),” the Central Bank stated.

According to the Annual Economic Survey debt service on Central Government domestic bonds and loans was recorded at $7.2 billion during the fiscal year, lower than payments recorded in the previous fiscal year ($7.8 billion).

“Principal repayments amounted to $4.6 billion, of which a total of $4.1 billion was repaid on bonds and loans contracted under the Development Loans Act, while repayments on CLICO and HCU zero-coupon bonds amounted to $469.3 million and $18.5 million, respectively,” it stated.

Central Government domestic interest payments (excluding interest paid on sterlised debt) amounted to $2.6 billion during the last fiscal year.

“Central Government external debt outstanding stood at US$4.7 billion (16.4 per cent of GDP) at the end of September 2022, reflecting a marginal increase of 2.9 per cent from the end of September 2021. During FY2021/22, one new loan from the Corporación Andina de Fomento (CAF) in the amount of US$175 million, was disbursed for the modernisation of transportation infrastructure,” it stated.

Loan disbursements from previously contracted facilities totalling US$114.8 million comprised inflows from the Inter-American Development Bank (US$54.4 million) for various projects, including support for vulnerable persons affected by the COVID-19 pandemic, the Multi-phase Wastewater Rehabilitation Programme, the Single Electronic Window for Trade and Business Facilitation and the Health Services Support Programme; the Export-Import Bank of China (US$30.9 million) for the Phoenix Park Industrial Project; and CAF (US$24.5 million) for the Covid-19 pandemic.

Central Government’s external debt service totalled US$313.7 million for the year, of which US$169.9 million was earmarked for principal repayments.

“For the year ending September 2022, non-self-serviced guaranteed debt, which comprise borrowings by state-owned enterprises and statutory bodies, amounted to $3.9 billion,” it stated.

Disbursements during the year mainly comprised $1.4 billion to the National Insurance Property Development Company Limited (NIPDEC), $1.1 billion to the Housing Development Corporation (HDC), $500 million to the Urban Development Corporation of Trinidad and Tobago (UDeCOTT) and $457.7 million to the Water and Sewerage Authority of Trinidad and Tobago (WASA).

“Approximately $1.5 billion of total borrowings was used to refinance maturing obligations. Total debt service by state enterprises and statutory boards amounted to $4.7 billion, of which $3.3 billion represented principal repayments,” it stated.


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