COVID-19 Budget: Increased deficit level gives sharp rise to debt – Fiscal Supplement
27 March, 2020, 1:08 pm
The Fijian Government’s debt is projected to be $6,988.9million, equivalent to 60.9 per cent of GDP by the end of July, 2020.
This is stated in the economic and fiscal update supplement to the COVID-19 Response Supplementary Appropriation Bill 2020 that was presented in Parliament last night.
“The sharp increase in the debt to GDP ratio is due to the large increase in deficit level as Government revenue is expected to decline significantly, accompanied by a sizeable downward revision to nominal GDP (9.6 percent lower than original budget forecast),” the supplement noted.
“Moreover, the increase in debt levels is also attributed to $224.9m (2 per cent of GDP) loans drawn in anticipation of refinancing the global bond due in October 2020 and these funds are kept in Government’s offshore account.”
The supplement states by the end of July this year, domestic debt is forecast to comprise 71 per cent of the total Government debt portfolio while the remaining 29 per cent is external debt.
“Managing refinancing and interest rate risk continues to be a key focus of Government’s debt management objectives with current indicators being maintained at prudent levels.”