The debt-to-GDP ratio is expected to come down to 23.7 per cent at the end of the year, which will be 3.7 per cent below the end-2016 level, Finance Minister Vladislav Goranov said Friday during Question Time in Parliament. He was asked about the level of the government debt by Socialist MP Roumen Gechev.
Goranov expects the debt-to-GDP ratio to continue going down until it reaches around 20 per cent in 2020. The forecast is for 22.3 per cent in 2018 and 21.3 per cent in 2019.
The costs for servicing the government debt is forecast at 1.9 per cent of all expenditures in the consolidated fiscal programme for 2017, which makes a nominal of around 792.9 million leva.
It is expected to be 1.74 per cent or 684.3 million leva in 2018, 1.73 per cent or 705.7 million leva in 2019 and 1.7 per cent or 723.3 million leva in 2020.
In any case, these costs will be below 1 per cent of the GDP, said Goranov.
He assured the MPs that the ratio of short- to long-term government debt will remain sustained until 2020 and will not affect adversely the risk profile of the debt.
The Finance Minister recalled that the government planned to take out new debt in 2015 and 2016 to refinance the existing debt. The debt payments maturing in 2015 totalled 7 billion leva and in 2016 1.4 billion leva.
Better-than-planned financial performance, however, allowed to keep the resources that were provided for financing the debt and add it to the fiscal reserve - along with the unused buffer provided for the bank asset review. As a result of this, the fiscal reserve grew by some 5 billion leva to reach 7.9 billion at the end of 2015 and 12.9 billion leva at the end of 2016.
This was the reason why in 2017 government bonds were issued on the domestic market for only 800 million leva and they can only be used for refinancing maturing external debt.
Having heard the Finance Minister's answer, MP Gechev said that the Socialist MPs expect Goranov to appear for another hearing on the government debt in more detail. He handed to Parliament Chair Tsveta Karayancheva 62 MP signatures requiring of the Finance Minister to be at the hearing and answer the questions placed by the opposition.