St. Vincent and the Grenadines’ public debt, as of September 30, this year, stood at EC$2.4 billion (One EC dollar=US$0.37 cents), an increase of 12.8 percent year on year, Finance Minister Camillo Gonsalves has said.
He said that as of September.30, domestic debt was EC$638.5 million or 26 percent of the total, while external debt was EC$1.8 billion or 73.9 percent.
Total debt service for 2024 is estimated at EC$282.9 million or 37 percent of current revenue, with Gonsalves informing lawmakers during the recent debate on the EC$1..6 billion Estimates of Revenue and Expenditure for 2024 that “the main changes with the domestic debt portfolio over that period are the balance outstanding on overdrafts owed by the public sector increased by 72 percent.”
He said that the local loans portfolio fell by 9.1 percent due to amortization on several loans during that period, and total government bonds and notes issued and outstanding over the period increased by eight percent.
Gonsalves said that on September 30, there was an EC$194 million or 12 percent increase in the external debt, compared with 2022.
“This increase in debt had been forecast as the government initiated multiple large projects, including the modern port, the school improvement project, the hotel developments, and the National Road rehabilitation project, all of which take advantage of concessionary lending by various parties,” he told lawmakers.
He said the main drivers accounting for the change in external indebtedness of the government are the Port Modernisation Project, estimated at EC$166.5 million; the first phase of the School Improvement Project at EC$15.3 million; the MDM Disaster Risk Reduction and Climate Change Adaptation Programme, costing EC$11.3 million, all of which was finance by the Barbados-based Caribbean Development Bank (CDB).
In addition, the government received from the World Bank an EC$30.9 million loan for the Volcano Eruption Emergency Response Project (VEEP), EC$12.9 million for the Caribbean Regional Digital Transformation Project, EC$12.8 million for the OECS Regional Health Project and EC$19.9 million for the Human Development Service Delivery project.
The debt to Taiwan has also increased, with the country providing EC$20.3 million for the modern high court, EC$24.3 million for the hotel development project, EC$25 million for the port modernization project, and EC$27 million and the national road rehabilitation project.
The government also borrowed EC$23.5 million from the CARICOM Development Fund for hotel development.
Gonsalves said that despite the more significant public debt, net repayments were recorded on some International Monetary Fund (IMF) loans during the year to September 30.
“Other notable net repayments were recorded as EC$4.8 million repaid to Damen Shipyards; EC$1.3 million repaid on loans to the Kuwaiti fund, EC$$1.7 million repaid on loans to the International Monetary Fund. And those were some of the emergency borrowings in the wake of the natural disasters,” he said.
The budget debate is expected to begin on January 1.
