Gross public debt records faster growth in past year

Banks increase their debt portfolios

2012 ended with gross public debt at $57.7 billion, recording a 7.5 percent increase from the previous year. At end 2011, public debt had grown by only two percent annually.

Lira-denominated debt totaled the equivalent of $33.3 billion, up by less than two percent year-on-year, while foreign currency debt grew by 16 percent, to $24.4 billion. The rise was mainly attributed to the Ministry of Finance’s ‘Debt Replacement Agreement’ with the Central Bank (BDL), which consisted of a $2 billion triple-tranche transaction redeeming an equivalent amount of Treasury bills (T-bills) from the BDL. $1.7 billion worth of new Eurobonds issued during 2012 also contributed to an increase in Eurobonds.

Commercial banks had the largest share of the locally-held debt at 54 percent, up from 51 percent at end-2011. They were followed by the BDL which held another 30 percent, down from 33 percent previously. Public agencies, financial institutions, and the general public held 15.7 percent of local debt, almost unchanged year-on-year.

Eurobond holders, foreign private sector loans, and special T-bills in foreign currencies, held a combined share equal to 89 percent of foreign currency-denominated debt. Foreign governments and multilateral institutions held shares of 5.4 percent and 4.4 percent respectively. Paris II loans held less than one percent of total external debt.

The weighted interest rate on outstanding T-bills was 6.5 percent, while the weighted interest rate on Eurobonds was 6.6 percent.

Net public debt, calculated as gross debt excluding public sector deposits at the BDL and at commercial banks, rose by six percent to $49.1 billion.