Fijian government expects debt to reach $1.9 billion

Fiji’s government debt is expected to reach $9.1 billion by the end of July 2022, says the Economic and Fiscal Update Supplement to the Revised National Budget 2021-2022.

Domestic debt is estimated at $5.8 billion and external debt at $3.3 billion.

“On March 18, 2022, the government accessed Phase 2 of JICA’s Emergency Support Loan for COVID-19 Crisis Response in the amount of 10 billion yen ($176.8 million) on concessional terms, with a 15-year repayment period including a 4-year grace period at an interest rate of 0.01%,” the document reads.

“The first phase of the program was also 10 billion yen ($187.4 million) and was accessible in fiscal year 2020-2021.

“Following the Phase 2 draw, JICA is now the largest bilateral lender to the government.

“The government is currently finalizing policy-based loans with the AfDB and the World Bank Group for an amount of approximately $300 million ($625.79 million).

“The cost and risk indicators of the Fiji government’s debt portfolio over the past three years have shown significant improvement in terms of weighted average interest rates and rollover risk, primarily attributed to funding sources at concessional terms and the issuance of long-term bonds at low interest rates in the domestic market.

The document indicates that the government’s general debt policies include restoring the debt-to-GDP ratio on a downward trajectory, reducing the cost of debt through concessional financing from multilateral and bilateral partners, maintaining a optimal cost and maturity for the government’s debt portfolio to ensure prudent management of liabilities. , developing the domestic bond market to focus more on liquidity, transparency, secondary market trading, settlement mechanisms and investor diversification, ensuring consistent domestic market operations and providing clear guidance to investors and market signals for market development and minimize the risks associated with retrocession and possible Liabilities.

Comments are closed.