Antigua and Barbuda’s debt-to-GDP ratio has fallen to about 60 percent following a significant reduction in the country’s external debt, placing the government in a stronger position to access international financing for future development projects, Director General of Communications Maurice Merchant said Thursday.
Merchant disclosed the updated debt position while responding to questions during the weekly post-Cabinet media briefing, where he expanded on Cabinet’s earlier announcement that the government had reduced its outstanding debt to the People’s Republic of China from more than US$300 million to approximately US$120 million.
He said finance officials and Cabinet members were enthusiastic about the progress made in reducing the country’s debt burden.
“The government is very excited about this news coming from the finance officials in relation to the reduction of the debt to the People’s Republic of China,” Merchant said.
Merchant noted that much of the debt was inherited from major infrastructure projects undertaken before the current administration took office, including financing for the former Mount St. John’s Medical Centre, the VC Bird International Airport redevelopment and the Wadadli Power Plant. He pointed out that only the financing for the seaport expansion was undertaken during the Gaston Browne administration.
He described reducing those obligations to roughly one-third of their previous level as a significant achievement.
“Repayment of these debts, bringing it down to a third of what it was before, is a significant milestone,” Merchant said.
According to Merchant, the reduction demonstrates the government’s commitment to responsibly managing public debt and honoring its financial obligations.
“It sends a signal that government is very serious about its obligations to financial institutions [and] the management of its debt stock,” he said.
Merchant revealed that Antigua and Barbuda is now approaching a debt-to-gross domestic product ratio of approximately 60 percent, a benchmark he said has been welcomed by finance officials.
“We are at the threshold of about 60 percent of debt to GDP, and I can tell you that the finance officials and the Cabinet are dancing. They are excited about this,” Merchant said.
He explained that the lower debt burden strengthens the country’s standing with international lenders and expands its ability to secure financing for future capital projects.
“It places the government in a particular position that it can go to international institutions and secure financing for various capital projects within Antigua and Barbuda,” Merchant said.
Merchant said the improved fiscal position also enhances the country’s credibility abroad.
“It tells the international organizations and the international community that Antigua and Barbuda’s government is working in the interest of the people in a prudent and responsible manner,” he said.
Earlier in the briefing, Merchant told reporters that Cabinet had been informed the government reduced its Chinese-funded loan obligations from more than US$300 million to approximately US$120 million , while fully repaying the loan used to finance the Sir Lester Bird Medical Centre. Cabinet was also advised that the reduction creates greater fiscal space for investment in national development priorities and further strengthens the country’s macroeconomic position.
This article was originally published by Antigua News Room. Read the original article here: Government Says Antigua and Barbuda's Debt-to-GDP Ratio Nears 60% Following Debt Reduction.