Last Updated on Thursday, 3 June, 2021 at 8:56 am by Andre Camilleri
At the end of 2020, General Government debt amounted to €6,960 million, or 54.3% of GDP, an increase of €1,257.2 million over 2019.
In 2020, the Financial Corporations sector held the biggest share of debt with 60.5%, followed by Households and Non-Profit Institutions Serving Households (NPISH) with 19.1%.
The share of the Rest of the World was 18.2%, an increase of 6.1 percentage points over the debt held in 2017. The Non-Financial Corporations sector held 2.2% of the debt.
Debt securities, which include Malta Government Stocks and Treasury Bills, are by far the preferred debt instrument for General Government, with €5,945.1 million, or 85.4%, of the total debt in 2020.
Other debt instruments are Loans and Currency, with 7.8% and 6.8%, respectively. The increase reported under Debt securities (€1,030.0 million) mainly relates to the financing of the Government’s Covid-19 measures, while the increases in Loans (€135.7 million) and Currency (€91.9 million) mainly represent the EU loan from the temporary Support to mitigate Unemployment Risks in an Emergency (SURE) instrument and the issuance of the 62+ Malta Government Savings Bonds, respectively. Almost all the debt owed by the General Government Sector is in national currency.
The stock of debt in foreign currencies has decreased considerably over the years and in 2020 it amounted to €0.1 million. The apparent cost of debt, which is the interest rate applicable to the whole nominal debt, was 2.7% in 2020, compared to 3.7% in 2017. This measure of the cost of debt reflects the interest rates prevailing at the issuance date and, given that the composition of debt is predominantly long-term, the indicator is not very sensitive to the more recent low interest rate scenario.
For 2020, the market value of the total General Government debt is estimated at €8,178.4 million, compared to the nominal value of €6,960.0 million. Market debt increased by €1,245.8 million over 2019, slightly lower when compared to the increase of €1,257.2 million in nominal debt.
For the year under review, the time structure of the debt by initial maturity shows that €3,228.7 million, or 46.4%, was issued with a maturity of 15 to 30 years. This was followed by debt issued for 1 to 5 years (13.3%), 5 to 7 years (13.1%), less than 1 year (10.2%), 10 to 15 years (9.8%), 7 to 10 years (6%) and more than 30 years (1.1%). The average remaining maturity of total debt for 2020 was 8 years 8 months, 3 months shorter than in 2019 and 9 months shorter than in 2017.
In 2020, the biggest share of debt by remaining maturity was in the 1 to 5-year category with €1,904.2 million, followed by the 7 to 10-year (€1,351.9 million) and the less than 1-year (€1,169.1 million) categories. Government guarantees on borrowing amounted to €1,172.6 million in 2020, or 9.1% of GDP, an increase of €182.4 million over 2019. The majority of Government guarantees are issued towards the Non-Financial Corporations sector, which accounts for 63.3% of the total guarantees. The Financial Corporations, Rest of the World and NPISH sectors benefitted from 33.9, 2.0 and 0.8% of Government guarantees, respectively. The Government guarantees are contingent liabilities, contingent on the actual call of the guarantee, and therefore these do not form part of General Government debt.