Last Updated on Thursday, 1 June, 2023 at 8:19 pm by Andre Camilleri
At the end of 2022, General Government debt amounted to €9,003.4 million, or 53.4 per cent of GDP, an increase of €739.5 million over 2021, the NSO said Thursday.
In 2022, the Financial Corporations sector held the biggest share of Government’s debt with 60.4 per cent, followed by the Rest of World with 22.0 per cent. The share of Households and Non-Profit Institutions Serving Households (NPISH) was 15.7 per cent, a decrease of 7.6 percentage points over the debt held in 2019. The Non-Financial Corporations sector held 1.9 per cent of the debt. Between 2019 and 2022 the Rest of the World sector experienced the highest growth in the holding of Government’s debt, an increase of 6.9 percentage points.
Debt securities, which include Malta Government Stocks and Treasury Bills, are the preferred debt instrument for General Government, with €7,663.0 million, or 85.1 per cent, of the total debt in 2022. Other debt instruments are Loans and Currency, with 9.6 per cent and 5.3 per cent, respectively. The largest increase was recorded under Debt Securities (€820.9 million), and it mainly relates to the government’s financing of the budget expenditures, including the financing of the energy support measures and the COVID-19 pandemic’s diminishing effect.
The apparent cost of debt, which is the interest rate applicable to the whole nominal debt, was 1.9 per cent in 2022, compared to 3.3 per cent in 2019. This measure of debt cost reflects the interest rates in effect at the time of issuance, and because debt is predominantly long-term, the indicator is not particularly sensitive to the current prevailing interest rate scenario.
For 2022, the market value of the total General Government debt is estimated at €8,421.1 million, compared to the nominal value of €9,003.4 million. While nominal debt increased by €739.5 million, market debt decreased by €734.2 million as a result of high inflation and subsequent interest rate increases.
For the year under review, the time structure of the debt by initial maturity shows that €2,828.8 million, or 31.4 per cent, was issued with a maturity of 15 to 30 years. This was followed by debt issued for 1 to 5 years (16.2 per cent), 5 to 7 years (13.9 per cent), 7 to 10 years (13.6 per cent), 10 to 15 years (10.3 per cent), less than 1 year (10.3 per cent) and more than 30 years (4.3 per cent).
The average remaining maturity of total debt for 2022 was 8 years 4 months, 7 months shorter than in 2021 and 2 months shorter than in 2019. In 2022, the biggest share of debt by remaining maturity was in the 1 to 5-year category with €2,271.0 million, followed by the 7 to 10-year (€1,848.5 million) and the less than 1-year (€1,348.9 million) categories (Table 7).
Government guarantees on borrowing amounted to €1,160.1 million in 2022, or 6.9 per cent of GDP, a decrease of €50.1 million over 2021. The majority of Government guarantees are issued towards the Non-Financial Corporations sector, which accounts for 61.8 per cent of the total guarantees. The Financial Corporations, Rest of the World and NPISH sectors benefitted from 34.4, 3.0 and 0.7 per cent 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.
The General Government debt data reported in this release are consistent with the April 2023 EDP notification as published in news release 067/2023 dated April 21.
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