Cyprus government debt drops to €23 billion

Cyprus’ government debt fell to €23 billion at the end of 2022, reflecting a 3.9 per cent decrease compared to December 2021, according to a report published on Friday by the Public Debt Management Office.

According to the data in the report, government debt, which exceeds 99 per cent of the total debt of the Republic of Cyprus, stood at €23.08 billion at the end of the previous year, compared to €24 billion in December 2021 and € 23.73 billion during the third quarter of 2022.

In terms of the decrease recorded over the third quarter of 2022, this was mainly attributed to the repayment of a domestic bond worth €617 million, which had an interest rate of 3.5 per cent, at the end of the quarter, which was the last of the series of domestic bonds, issued in the sale transaction of the former Cyprus Cooperative Bank to Hellenic Bank in the summer of 2018.

Regarding the debt structure, the largest part is allocated to the European medium-term bonds (EMTNs) with a total value of €13.45 billion, which corresponds to 58 per cent of the total debt. It should be noted that EMTN bonds are now the main financing tool of the Republic of Cyprus.

Foreign loans follow with a share of €8.26 billion, which corresponds to 36 per cent of the total debt.

Foreign loans also include a loan from the European Stability Mechanism (ESM) with a value of €6.3 billion, which was concluded as part of the bailout during the financial crisis of 2013.

What is more, the Republic of Cyprus had prematurely repaid the loan from the International Monetary Fund (IMF) of €1 billion, with the last repayment taking place in February 2020, shortly before the outbreak of the Covid-19 pandemic.

The value of domestic bonds at the end of 2022 fell to €617 million, corresponding to a share of 2.67 per cent of total government debt, while special bonds for natural persons amounted to €371 million or 1.6 per cent of the total debt.

Domestic loans remain at €250 million, referring to a bond to the Housing Finance Organisation, with a share of 1.08 per cent of the total debt.

Finally, the value of short-term government bills was €137 million, corresponding to a share of 0.6 per cent of the total debt.

According to the Public Debt Management Office, the annual financing programme for 2024 amounts to €1.52 billion, which is expected to be covered by €1 billion through the EMTN programme, €0.3 billion through Treasury Bills, €0.18 billion from loans from supranational organisations and €0.04 billion through the bonds of natural persons.