Government debt falls 3.9% to €23 bln

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Cyprus’ central government debt dropped to €23 bln, marking a reduction of 3.9% year on year, according to the Public Debt Management Office (PDMO).

Government debt is over 99% of total debt, reaching €23.086 bln last year, compared with €24 bln at the end of 2021 and €23.738 bln in Q3 2022.

Compared with Q3 2022, the reduction is mainly due to the repayment of a domestic bond amounting to €617 mln, the last of the series of bonds issued in the summer of 2018 by the government to facilitate the sale of the former Cooperative Cyprus Bank to Hellenic Bank.

International bonds issued under the European Medium Term Notes (EMTN) programme constituted Cyprus’ main financing toll with €13.45 bln, some 58% of Cyprus’ total debt.

At the end of 2021, foreign loans were €8.26 bln or 36% of total debt.

Foreign loans included €6.3 bln, issued by the European Stability Mechanism (ESM) for the Cypriot bailout during the 2013 financial crisis.

Nicosia has already repaid the loan granted by the IMF in 2013 amounting to €1 bln, with the last early repayment in 2020, just before the outbreak of the Covid-19 pandemic.

The outstanding value of domestic bonds at the end-2022 was €617 mln or 2.67% of total debt, while special bonds amounted to €371 mln or 1.60% of total debt.

Domestic loans were €250 mln or 1.08% of total debt, whereas short-term domestic T-bills amounted to €137 mln or 0.6% of total debt.

According to the PDMO, Cyprus’ financing plan for this year is €1.52 bln, which the EMTN programme will cover with €1 bln, €0.3 bln by domestic T-bills, €0.18 bln by loans to be issued by supranational organisations and a €0.04 bln trough issuances of special bonds for natural persons.