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Public debt estimated to decline to €24.1 billion by end-2021

07/10/2021 16:30

Cyprus public debt is estimated to drop to €24.1 billion by the end of 2021, the Ministry of Finance’s Public Debt Management Office has said, adding that Cyprus has “significant” cash reserves that cover the island’s financing needs for 2021 as well as a significant part of 2022.

In a newsletter for September 2021, the PDMO furthermore said that Cyprus General Government debt is estimated to be at €24.8 bn at the end August 2021, which is about at the same level as at the end of 2020.

Cyprus public debt surged by 18.5% in 2020 to €24.8 billion or 119% of GDP as the government accumulated large cash buffers with a view to support the real economy and employment amid the downturn due to the Covid pandemic. In 2020 output in Cyprus declined by 5.1%.
 
“Currently liquid assets are significant and are adequate to cover the financing needs of the Republic for 2021 and a significant part of 2022,” the PDMO said.
 
Furthermore, the PDMO added that Cyprus’ bond yields continued to be very low during the period July-September 2021 with yields of bonds maturing up to and including 2027 being in the negative area.
 
The Office noted that long-term yields are on an upward trajectory since late August, mainly driven by the future European interest rate projections and the response of the ECB to the latest development in the European economy and the pick-up in inflation.
In 2020, Cyprus’ 10year yield (2030 maturity) exhibited a minimum level on 20th of August at 0.104% and maximum on 19th of May at 0.591%, while in end-September it traded at 0.311%. 
 
Moreover, yields of the domestic monthly 13-week Treasury Bill auctions continued to drop, with the latest auction in September 2021 recording a negative yield of -0.41%, the PDMO added.