Authorities Back to the Idea of Borrowing Half a Billion Euros on the International Market

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On January 11, 2023, the government adopted the program on Medium-Term Public Debt Management for 2023-2025. The document is an update of the Medium-Term Public Debt Management Program for 2022-2024 in line with the forecast of state evolution and macroeconomic indicators, which formed the basis of the state budget for 2023, reports. The Program sets the main goal of public debt management, specific objectives, assesses the public debt management risks, and actions to be taken by the authorities to provide financing and improve the structure of the public debt portfolio. Among the activities under the Program are the maintenance and development of the domestic government securities market (GSM), the attraction of external government loans based on the cost/risk ratio and management of the operational risk associated with public debt. Given the state budget balance estimates, as well as the existing fiscal space, for the period 2023-2025, the Government’s medium-term financing needs will be covered mainly by net financing from external sources. This is one of the main factors contributing to higher public debt balances. Domestically, the Ministry of Finance will continue to pursue a predictable and flexible issuance policy, adapted to the requirements of the investment environment, in order to ensure predictability and transparency of the GS offer in order to be able to respond promptly to possible changes in market trends and investor behavior. In order to limit the exposure of the public debt portfolio to currency risk, interest rate risk, refinancing risk, the Program establishes indicative target intervals of the main parameters of risk and stability, ensuring a high degree of flexibility in public debt management.