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Mar 9, 2018

Debt Nears 100% of GDP

Dean Barrow

In the last few weeks, Financial Secretary Joseph Waight, in a memo to C.E.O.’s of government ministries, suggested that national debt had reached one hundred percent of GDP. The official figure is lower, but not by much. Belize is completing its first year of the re-structured Superbond. Interest payments on that astronomic figure are expected to run on a semi-annual basis subject to conditions until 2030 when the first of five soft bullets kicks in. Belmopan has borrowed extensively from development banks and bilateral arrangements with Venezuela and Taiwan, as well as on the local market. Prime Minister Barrow delineated the amount during the budget presentation.

 

Prime Minister Dean Barrow

“Mr. Speaker, at the close of 2017, the national debt stood at approximately three point five three five billion dollars, some ninety-three point eight percent of estimated 2017 GDP. This was made up of two point five zero nine billion dollars in obligations to external creditors, representing seventy-one percent of the total amount owing. The remaining twenty-nine percent, or approximately one point zero two six billion dollars, constituted the domestic debt stock. With regard to G.O.B.’s external debt portfolio – that is, debt obligations denominated in foreign currency and requiring foreign currency repayments – one point five-five billion dollars is owed to commercial bondholders; some four hundred million dollars is owing to the PetroCaribe Loan Program sponsored by the Bolivarian Republic of Venezuela; three hundred and five point three million dollars to the CDB; two hundred and forty-two million dollars to the Republic of China on Taiwan and two hundred and twenty-seven million dollars to the IDB. Thus, forty-one percent or four of every ten dollars of the national debt is payable to concessionary lenders, either bilateral, as in the case of Venezuela and Taiwan, or multilateral as with the CDB and the IDB. The average 2017 interest rate on G.O.B.’s concessionary loans was two point one-three percent. And in the case of the commercial bonds, our two re-negotiations in 2013 and 2016 lowered the coupon rate to just below five percent. This is to be compared to the eleven percent plus historical rate of P.U.P. commercial loans.”

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