Prepared by the Debt Management Unit
This Medium Term Debt Strategy (MTDS) is prepared to provide information on the GoSVG’s debt management objectives and outlines its plan for achieving a desired composition of its debt portfolio over the period 2015 to 2018. It is crafted within the context of the medium term macroeconomic framework and with the aid of the IMF/World Bank MTDS analytical Toolkit which provided quantitative analysis to evaluate the costs and risks of four alternative strategies examined. The analysis was carried out using the end of 2013 data as the base year.
A summary of activities in 2014 is presented in section 9. As at 31st December 2013 the total public debt stood at $1,439.3 million, an increase of 6.8 percent, from the December 31st, 2012 amount of $1,3567million. Of this amount, Central Government Debt stood at $1,222.8 million increasing by 6.7 percent from $1,145.8 million in 2012. Of the total central government debt, external debt accounted for $720.9 million or 37.5 percent of GDP and domestic debt accounted for $501.9 million or 26.1 percent of GDP.
The scope of this MTDS is confined to Central Government debt as at the end of 2013. In 2010 the government prepared its first MTDS to cover the period 2010 to 2013. It provided a qualitative analysis of the debt portfolio and proposed policies and strategies to mitigate the risks identified.
This 2015 – 2018 MTDS, is an enhancement, as it incorporates a quantitative analysis facilitated by the MTDS Toolkit. Four (4) alternative strategies were assessed and the cost and risk trade off of each strategy was examined. Of the alternative strategies analyzed, S1 which is the existing strategy provided the most optimal combination of cost and risk trade-off for achieving the debt management objectives.
The main objective of strategy 1 is to maintain the proportion of external and domestic debt in the ratio 60:40. This can be achieved by maintaining but not exceeding the limits on short term instruments on the domestic side while accessing the funds available under the CDB’s Country Strategy for SVG. Remaining financing needs would come from bilateral and commercial creditors based on their share of the debt portfolio as at December 31, 2013.