Public sector debt up $191 million in Q2

Public sector debt up $191 million in Q2

NASSAU, BAHAMAS — Public sector debt at the end of the second quarter increased by just over $191 million or 1.5 percent over the first quarter performance, according to the Ministry of Finance. 

“At end-December 2023, public sector debt outstanding was estimated at $12,747.5 million, which corresponded to respective gains of $191.4 million (1.5 percent) over end-September 2023 and $98.5 million (0.8 percent) since end-June 2023,” noted the Debt Management Office, in its fiscal year 2023/24 second quarter statistical report.

“For the first six months of the fiscal year, the central government’s component was higher by $168.0 million (1.5 percent) at $11,428 million, for an estimated 81.7 percent of nominal GDP compared with 82.6 percent at the end of June 2023. In a continuation of the earlier-net repayment trend, the debt of Agencies and GBEs at $1,319.5 million was lower by a cumulative $69.5 million (5 percent) relative to end-June 2023.”

The report detailed that by currency composition, Bahamian Dollar debt exposures represented the most significant proportion of public sector debt (55.7 percent), followed by the USD (37.6 percent), and the balance (7.7 percent) distributed across other foreign currencies.

In line with the government’s strategy to mitigate interest rate risk, the share of fixed-rate debt advanced to 62.8 percent of the total portfolio at the end of December 2023 from 60.9 percent at end-June 2023. 

“According to the creditor mix, the year-to-date growth in the public sector debt stock was primarily due to increased liabilities to domestic creditors ($93.1 million), with higher exposures to public corporations ($129.1 million) and the private sector ($12.8 million) moderated by net repayments to the Central Bank ($9.9 million) and commercial banks ($38.9 million). On the external side, the increase in exposure was held to $5.6 million despite the central government’s new commercial borrowing, which elevated liabilities to financial institutions ($75.9 million). Significant offsets were provided by the net reduction in debt to multilateral and bilateral ($63.7 million) creditors and private capital markets ($6.6 million),” the report noted.