Maltese Structure of General Government Debt: 2020

INDEXGDPL2020-37In 2020, the Financial Corporations sector held the biggest share of debt with 60.5 per cent, followed by Households and Non-Profit Institutions Serving Households (NPISH) with 19.1 per cent. The share of the Rest of the World was 18.2 per cent, an increase of 6.1 percentage points over the debt held in 2017. The Non-Financial Corporations sector held 2.2 per cent of the debt.

Debt securities, which include Malta Government Stocks and Treasury Bills, are by far the preferred debt instrument for General Government, with €5,945.1 million, or 85.4 per cent, of the total debt in 2020. Other debt instruments are Loans and Currency, with 7.8 per cent and 6.8 per cent, respectively. The increase reported under Debt securities (€1,030.0 million) mainly relates to the financing of the Government’s COVID-19 measures, while the increases in Loans (€135.7 million) and Currency (€91.9 million) mainly represent the EU loan from the temporary Support to mitigate Unemployment Risks in an Emergency (SURE) instrument and the issuance of the 62+ Malta Government Savings Bonds, respectively.

Almost all the debt owed by the General Government Sector is in national currency. The stock of debt in foreign currencies has decreased considerably over the years and in 2020 it amounted to €0.1 million. The apparent cost of debt, which is the interest rate applicable to the whole nominal debt, was 2.7 per cent in 2020, compared to 3.7 per cent in 2017.

This measure of the cost of debt reflects the interest rates prevailing at the issuance date and, given that the composition of debt is predominantly long-term, the indicator is not very sensitive to the more recent low interest rate scenario.