Debt ratio up to 37 per cent

MBABANE - Preliminary figures for the end of the past month show that total public debt stood at E26.3 billion.

This translates to 37.1 per cent of gross domestic product (GDP). This shows a marginal increase of 3.1 per cent when compared to E25.5 billion recorded in July this year. The increase in total public debt, according to the Central Bank of Eswatini (CBE), is largely due to an increase in domestic debt.

Preliminary figures show that public external debt stood at E10.6 billion, an equivalent of 15.0 per cent of GDP. This shows that public external debt has remained constant when compared to July.

Domestic

As at the end of August this year, outstanding public domestic debt stood at E15.7 billion, which is an equivalent of 22.1 per cent of GDP. This shows an increase of 5.4 per cent when compared to E14.9 billion recorded in July. This increase is because of a further advance of E500 million accessed by government, bringing the total advance to E1 billion so far. Alongside

bond maturities amounting to E155 million, during the same month government further issued suppliers’ bonds totalling to E195 million as well as plain vanilla bonds amounting to E200 million.

While the rising debt ratio figures for the country do not make for riveting reading; the only positive is that they are yet to reach alarming levels.

A study by the World Bank found that countries whose debt-to-GDP ratios exceed 77 per cent for prolonged periods experience significant slowdowns in economic growth. Pointedly, every percentage point of debt above this level costs countries 1.7 per cent in economic growth.