2024-07-14 14:35:12
The interest that the state will pay is at least 3 percent
A new debt of BGN 1.3 billion has been taken on by the caretaker government since mid-April until now. This is clear from BNB data published on the central bank’s website. The money came from government securities sold on the domestic market.
The step of the previous auctions is BGN 200 or 300 million each, and the main resource is in reopening issues of already issued 6- and 10-year bonds. The expected annual return for investors is a minimum of 3%.
According to the finance ministry’s issuance calendar, there will be at least three more Treasury bill auctions by the end of this year, the last of which is scheduled for November. They will raise another BGN 600 million.
The limit for new debt recorded in the Budget Law for 2024 is up to BGN 11.08 billion. If the emission calendar is fulfilled, there is a possibility of exiting the international markets. But in the conditions of the ongoing political instability in Europe, it is not clear at what interest rate the deal will be.
The last time Bulgaria issued external debt was in January 2023, and with the collected money it covered payments under the old and kept the budget deficit below 3%.
The three-year debt management strategy of the Ministry of Finance foresees that for 2024, 2025 and 2026 the limit for new loans will be between BGN 7 and 9 billion per year. The purpose of debt operations is to refinance old debts and cover deficits in the treasury.
Nevertheless, due to the expected growth of the economy, the debt-to-income ratio of up to 1 year, which is a measure of liquidity risk, will decrease in 2024 from 7 to 5.2%.
At the end of this year, the state debt should not exceed BGN 47 billion and be more than 30% of GDP. This indicator is important for our entry into the Eurozone, and Bulgaria covers it. Even with new loans, it remains well below the threshold set for eurozone countries at 60%.