According to latest available figures, Cyprus’ public debt has fallen 3.1 per cent or €24.18 billion by the end of June this year compared to the same period last year. When compared to the first quarter of this year the island nation’s gross public debt was reduced by 3.9percent.
Using available cash reserves, the government repaid €1 billion of a European Medium-Term Note (EMTN), reported the Cyprus Mail earlier this week.
By June of this year, Cyprus debt had declined to its lowest level since the COVID-19 pandemic took hold. However the debt remains at a higher level compared to the period before the pandemic as the Cyprus finance ministry went ahead with large debt issuances to boost government cash buffers to support economic activity during the COVID-induced crisis, Kathimerini reported.
According to the latest figures 10 percent of Cyprus’ gross debt to June was held in cash reserves which covered the financing needs for this year and a large part of 2023. The country’s finance ministry reported that it in its Stability Program for 2022-25 it projected public debt to fall to €23.5billion or 93.9 percent of Gross Domestic Product by the end of the year, and would continue its downward trend in following years as the government reduced its cash buffers.
“The expected reduction of general government debt by 10.1 percentage points is attributed to the repayment of a significant amount of debt due within the year which is expected to be covered both through new debt issuances as through the utilisation of the cash buffer,” Cyprus’ finance ministry said in a statement.
It projected gross public debt for 2023 to decline to about 88.2percent; 81 percent by the end of 2024 and 76.7 percent by 2025.
Earlier this year, the ministry issued €1 billion in a 10-year EMTN bond to cover its basic financing needs for the year. The ministry plans to issue a €500 million bond.