Central Government's debt down to €22.4 billion in 2023

The debt of the Central Government of Cyprus amounted to €22.4 billion at the end of 2023, representing approximately 99% of the total debt of the Republic of Cyprus. This figure reflects a decrease of €689 million or 3% compared to the corresponding period last year.

The reduction is entirely attributed to the repayment of domestic bonds and securities, while the remainder of the Euro Medium Term Notes (EMTNs), which constitute the main source of funding, remained unchanged. 97% of the Central Government's debt comes from external borrowing sources (EMTN bonds and loans from official external entities).

Compared to the end of 2020, a year during which the Government issued significant amounts of debt to build up reserves to cover increased needs due to the COVID-19 pandemic, the Central Government's debt has decreased by €2.2 billion.

According to data released yesterday by the Public Debt Management Office (PDMA), the balance of the EMTNs remained unchanged at €13.45 billion, accounting for 60% of the total government debt. Debt in EMTN bonds remained stable, as Cyprus issued its first green/social bond worth €1 billion last year, while also redeeming a mature bond of the same value.

Moving to external loans, the balance at the end of 2023 amounted to €8.52 billion, compared to €8.26 billion at the end of 2022, representing 37% of the total debt. This category includes loans from the European Stability Mechanism (ESM), totalling €6.3 billion, which were obtained during the 2013 crisis, with repayment starting in 2025 and completing in 2031.

Regarding domestic loans, the Housing Finance Corporation (HFC) loan of €250 million remains outstanding, maturing in 2026.

The balance of Government Securities has decreased to just €20 million at the end of 2023, compared to €137 million in the corresponding period last year. There has been a significant reduction in the balance of domestic bonds as well, which amounted to €92 million at the end of 2023, down from €617 million at the end of 2022.

According to PDMΟ, the balance of bonds and special bonds for individuals decreased to €308 million at the end of 2023 from €371 million in the corresponding period last year. Consequently, the total debt in internal securities at the end of 2023 decreased by more than half compared to the end of 2022, reaching €420 million from €1.12 billion respectively.

It is worth noting that the financing needs for 2024 have been set at €1.3 billion, of which €1 billion will be raised through the issuance of EMTN bonds in international markets.

(Source: CNA)