T&T’s debt: $123.8b
- Published on May 5, 2017, 9:57 pm AST
- By Asha Javeed
The Central Government’s debt stood at $60 billion, an increase of $9 billion from September 2015 to September 2016.
The data is contained in the Auditor General’s 2016 Report which was laid in Parliament yesterday.
According to the voluminous document, the debt is broken down into three categories—domestic debt, external debt and contingent liabilities.
The contingent liabilities which move the debt from $60 billion to $123.8 billion are:
-Balances on Loans assumed by the Government—$4.1 billion
-Loans and credits guaranteed by the state—$14.442 billion
-Letters of comfort—$14.919 billion
-Promissory Notes—$5.148 billion
-Open market operations re Treasury bills—$28.8 billion
Since 2012 public debt has been steadily increasing.
In 2012, revenue was $52 billion while public debt stood at $42 billion.
In 2013, revenue increased marginally to $53 billion while debt stood at $43 billion, the Auditor General’s report indicated.
In 2014, revenue jumped to $62 billion but debt also rose to $47 billion while in 2015, with revenue at $60 billion, debt was $48 billion.
By 2016, the revenue was steady at $60 billion but debt jumped to $58 billion.
The government borrowed domestically using three financial instruments- Treasury bills—$800 million, Treasury notes—$183 million and Government Loans raised by bonds-$30,910 million.
The holders of domestic debt are the Central Bank of Trinidad and Tobago—$23,626.2 million, commercial banks—$13,900.7 million and individuals-$263.3 million.
The country’s external debt at September 30, 2016, was $19.8 billion, the report showed.
This was a 59 percent increase from 2015 of $7.2 billion.
This was due to two new loans—US$1,000 million from Deutsche Bank Securities and First Citizens Bank and Euro 168.5 million from Ing Bank NV for Damen Naval Assets- and the repayment of three loans. The debt servicing of loans stood at $527 million for 2016.
Loans serviced for 2015 amounted to $1.9 billion, the Auditor General’s report stated.
As at September 30, 2016, the letters of comfort issued by Government were for $14.9 billion while loans guaranteed by the State amounted to $14.5 billion.
“The issue of the public debt and debt sustainability has long been a concern for policymakers of both fiscal and monetary authority. The central Government Debt and Contingent Liability must be examined and analyzed in its entirety to ensure present and future debt sustainability. It is important for overall macroeconomic policy to manage the debt and it needs to be coordinated closely with fiscal, monetary and other macroeconomic and financial policies,” stated Catherine Laban, Comptroller of Accounts in the report.
Two weeks ago, rating agencies Standard and Poor’s (S&P) and Moody’s downgraded T&T.
S&P downgraded T&T’s long-term sovereign ratings- that is the risk associated with investing in the country- from A- to BBB+.
S&P said the downgrade reflects a further deterioration of the country’s debt burden which includes a higher-than-expected rise in Government debt to Gross Domestic Product (GDP) and the interest burden over 2017-2020.
S&P said that T&T’s Government debt rose to 35 per cent of GDP in 2016, from 32 per cent of GDP in 2015, and is likely to rise again this year, to 37 percent of GDP before gradually declining in 2018-2020.