IN terms of GDP share, Bulgaria's public debt will decrease from a projected 56 per cent for 2003 to 40 per cent for 2006, Finance Minister Milen Velchev has announced.
He made the announcement at a presentation of a three-year strategy for public debt management, adopted by the Government last Thursday.
Debt interest payments will range between 2.3 and 2.4 per cent of GDP in the 2004-2006 period. According to the strategy, this is below the level of countries with a higher credit rating and does not jeopardise the budget deficit and debt refinancing.
The strategy envisages a reduction of dollar-denominated debt, while the euro-denominated share is to reach 65 to 70 per cent.
Deputy Finance Minister Krassimir Katev said this proportion is required by the currency board arrangement which pegs the lev to the euro and reflects export earnings.
One of the purposes of debt management is to increase the share of internal debt at the expense of lower external financing. Another target is a gradual increase of the fixed-interest debt and of the lev- and euro-denominated debt.
The strategy has been co-ordinated with the International Monetary Fund (IMF), the World Bank and the European Commission and will be updated on an annual basis.
Bulgaria will not issue new eurobonds this year and will cover the financial shortage with issues on the domestic market, Katev said. The gap is not expected to exceed 100 million to 150 million euro a year. Since the beginning of this year Bulgaria has issued 105 million euro worth of euro-denominated bonds.
Velchev said the Government plans to nearly double the ratio of internal debt to the overall debt to 20 per cent in 2006.
The Government will aim at achieving stable levels of the nominal state debt, servicing will range between 860 million and 1.6 billion euro a year in the next decade. The payments are distributed equally, except for the years 2007, 2013 and 2015 when the global bond issues mature.
Katev said the debt is well scheduled in time, with most of the debts having maturity above five years. Nevertheless, the relatively big current account deficit, which reached $842.2 million for 2002, necessitates a substantial foreign capital inflow.
Increasing investor confidence in Bulgaria and improving the macro economic environment are the main preconditions for the government to re-orient its borrowing policy from the official lenders, such as the IMF and the World Bank, to the capital markets and private creditors, finance ministry officials said.
He made the announcement at a presentation of a three-year strategy for public debt management, adopted by the Government last Thursday.
Debt interest payments will range between 2.3 and 2.4 per cent of GDP in the 2004-2006 period. According to the strategy, this is below the level of countries with a higher credit rating and does not jeopardise the budget deficit and debt refinancing.
The strategy envisages a reduction of dollar-denominated debt, while the euro-denominated share is to reach 65 to 70 per cent.
Deputy Finance Minister Krassimir Katev said this proportion is required by the currency board arrangement which pegs the lev to the euro and reflects export earnings.
One of the purposes of debt management is to increase the share of internal debt at the expense of lower external financing. Another target is a gradual increase of the fixed-interest debt and of the lev- and euro-denominated debt.
The strategy has been co-ordinated with the International Monetary Fund (IMF), the World Bank and the European Commission and will be updated on an annual basis.
Bulgaria will not issue new eurobonds this year and will cover the financial shortage with issues on the domestic market, Katev said. The gap is not expected to exceed 100 million to 150 million euro a year. Since the beginning of this year Bulgaria has issued 105 million euro worth of euro-denominated bonds.
Velchev said the Government plans to nearly double the ratio of internal debt to the overall debt to 20 per cent in 2006.
The Government will aim at achieving stable levels of the nominal state debt, servicing will range between 860 million and 1.6 billion euro a year in the next decade. The payments are distributed equally, except for the years 2007, 2013 and 2015 when the global bond issues mature.
Katev said the debt is well scheduled in time, with most of the debts having maturity above five years. Nevertheless, the relatively big current account deficit, which reached $842.2 million for 2002, necessitates a substantial foreign capital inflow.
Increasing investor confidence in Bulgaria and improving the macro economic environment are the main preconditions for the government to re-orient its borrowing policy from the official lenders, such as the IMF and the World Bank, to the capital markets and private creditors, finance ministry officials said.
