The public debt of the state in the next three years will be increased by 622 million euros, from 4,122 billion this year to 4,744 billion at the end of 2026.
This is the projection of the Ministry of Finance in the Bill on the Budget for the coming year.
According to the document, the domestic debt in the next three years will fall from 545 million this year to 240 million at the end of 2026, while for the same period the external debt will increase from 3,5 billion to 4,4 billion.
In the structure of external debt, the largest share is debt based on Eurobonds of 48,7 percent, while in second place is the loan from Exim China Bank with a total share of 19,81 percent. The debt based on Eurobonds is 1,5 billion euros, while the Chinese creditor is owed 711 million euros.
In the coming period, the Ministry of Finance expects an increase in borrowing costs due to the increase in interest rates on the global financial market, and part of the debt is related to variable interest rates, predominantly in euros.
"In the next year, the debt is expected to increase in absolute amount compared to 2023, as well as in relation to GDP, due to the fact that the estimated GDP for the next year is higher by about 409,66 million euros compared to this year's GDP. It is expected that the national debt will amount to 2024% of GDP at the end of 60,61, while the public debt will amount to about 61,62% of GDP", according to the Ministry of Finance.
The total increase in the public debt in the next three years is about 55 million less than the debts that the state must repay in the next year in the amount of 677 million, of which 138 million is interest.
On the domestic market, they return 232 million
According to the data of the Ministry of Finance, 232 million debts must be repaid on the domestic market, and these are mainly loans that were taken from domestic commercial banks in the previous period.
"The planned amount for repayment of principal to residents also includes 70 million euros of projected repayments for government bonds and long-term loans that will be closed in 2023," the Ministry of Finance states, adding that half a million euros will be set aside in the next year for debt repayment for old foreign currency savings with the former Dafimet and Jugoskandik banks.
When it comes to returning debts to foreigners in the next year, around 92 million euros should be returned to international financial institutions. These are debts owed to the International Bank for Reconstruction and Development, the Paris Club of Creditors, the Development Bank of the Council of Europe, the European Investment Bank, the European Bank for Reconstruction and Development, the International Monetary Fund...
"In addition to the above-mentioned obligations, interest payments will be made next year based on the emission of Eurobonds from 2018, 2019 and 2020, in the amount of 51,19 million," said the Ministry of Finance.
Debts with the World Bank of almost 98 million euros are due for collection. These are guarantees within the framework of two credit arrangements (PBG1 and PBG 2) that were provided for loans from four banks (Credit Suisse AG, OTP Bank PLC, CKB Podgorica, Societe Generale) due to a lack of money in the state coffers.
The World Bank guarantee has arrived for collection
At the end of 2017, the SB approved a guarantee based on public policy (Policy based guarantee - PBG) of 80 million euros to Montenegro, which enabled the state to borrow up to 240 million euros, under more favorable conditions and with a lower interest rate. In this way, money was provided for financing the budget in 2018, with the possibility of repayment and refinancing of the existing debt.
"In 2024, obligations will be serviced, based on the loan for the highway taken from the Chinese Exim bank, based on the principal of 61,52 million euros and on the basis of interest and other costs, 14,15 million. In the structure of external debt, the largest share is debt based on Eurobonds of 48,7 percent, while in second place is the loan from Exim China Bank with a total share of 19,81 percent. In relation to the national debt, liabilities based on Eurobonds make up 48,70%, while the share of debt based on the loan to Exim China Bank in the national debt is 17,85%. Until 30.09.2023. in 214,35, debt repayment was made based on the principal, to residents and non-residents, in the total amount of 0,08 million euros, repayment based on old foreign currency savings in the amount of 2,81 million euros and repayment based on guarantees in the amount of 79,81 million euros. Repayment based on interest, to residents and non-residents, amounted to a total of XNUMX million euros", said the Ministry of Finance.
Of the total state debt at the end of September this year, 79,92% of the debt amount was expressed in local currency, i.e. in euros.
"When it comes to the risk of interest rate changes, debt with a fixed interest rate predominates in the total state debt. However, bearing in mind significant changes in the global financial market characterized by an increase in interest rates, both fixed and variable, the impact of these developments on the debt portfolio of Montenegro is expected. Debts with a variable interest rate, which are mainly linked to the Euribor, make up 22,17 percent of the national debt. With that, an increase in borrowing costs is expected in the coming period", they said in this government department.
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