BRATISLAVA, March 7, (WEBNOVINY) – Slovakia’s state debt rose by more than EUR 6 billion over less than two years. Under the impacts of the crisis, it began rising steeper in 2009, when it increased from nearly EUR 17.8 billion to EUR 21 billion. After three quarters of 2010, it amounted to nearly EUR 24 billion. “The main factors behind the steep debt increase are economic crisis, which negatively affects the state budget deficit through a shortfall in tax revenues and income from social and health care contributions, conduct of anti-cyclic expansive fiscal policy and decrease in sources used for covering the state debt within the refinancing system,” writes the Finance Ministry in a strategy of debt management, which the Cabinet should debate. The state debt’s portion on the gross domestic product thus reached 36.6 percent as of late September 2010.
The better portion of the Slovak state debt is in the hands of local investors. As of September 30, local state debt accounted for 64.6 percent of the total debt of EUR 23.838 billion, while foreign debt constituted 35.4 percent. “The state debt was covered mostly by local entities, in particularly by commercial banks and mutual funds,” the material further states.
Nearly all the volume of the state debt is covered by issued bonds, whose share on the overall debt is 96.2 percent, while loans make up 3.5 percent. Until late 2008, the state debt was denominated mostly in Slovak crowns and euros. Since the adoption of euro, the portion of the debt in the local currency reaches 99.7 percent. The portion of other currencies was negligible, not acceding 0.3 percent on a cumulative basis.
Long-term debt, which is a debt with maturity of over one year, constituted over 93 percent of the total debt as of the end of September 2010. In 2007, there was no need for short-term sources to cover the state debt. Due to the crisis, T-bills, which have maturity of up to one year, were first issued in late 2008, and in 2009 and 2010.
SITA
