Interest on public debt continues to rise the deterioration of public finances and the low reserves of the Central Bank. under the current government interest was paid in pesos and foreign currency for a value of US$ 25,051 million.
After paying US$7,629 million in pesos and foreign currency during 2022, in the first four months of this year the equivalent of US$ 3,276 million was paid in interest, according to data from the Congressional Budget Office (OPC).
In relation to the first quarter of 2022, Interest expense on debt ($793,438 million) increased 9.1% year over year in real terms (above inflation), which is explained by higher interest payments on IMF loans and foreign currency securities issued as part of the September 2020 debt restructuring process.
For his part, US$695 million in interest was paid to the IMF in the first quarter of this year. And between now and the end of the year, according to the OPC, another 2,160 million dollars in interest should be paid. In total, US$2,855 million. These figures could increase if the Fund advances the expected disbursements between now and the end of the year.
The OPC Reports show that:
- The disbursements of interest were reached in 2020 an amount equal to US$ 8,043 million, of which 46% was made in foreign currency. Interest payments to multilateral organizations amount to US$1,994 million, of which 65% (US$1,306 million) corresponds to the IMF Stand By Loan.
- During 2021, interest cancellations amounted to an amount equal to US$ 6,103 million, of which 36% was made in foreign currency. Interest payments to multilateral organizations amount to US$1,969 million, of which 68% (US$1,347 million) corresponds to the IMF stand-by loan.
- During 2022, the payment of interest reached an amount equal to US$7,629 million, of which 53% was made in foreign currency. Payments to multilateral organizations amount to US$2,545m, of which 68% (US$1,721m) is IMF loans.
- In January 2023, interest was paid for the equivalent of US$ 1,463 million, of which 77% They were in foreign currency. The interest payments on securities issued in the 2020 debt restructuring process in foreign currency for the equivalent of US$ 1,022 million stand out.
- Interest of the equivalent of US$ 961 million was paid in February, of which 79% They were in foreign currency. Interest payments to the International Monetary Fund (IMF) of US$ 695 million were disclosed, corresponding to the 2018 Stand-By Loan (SBA) and the 2022 Extended Fund Facility (EFF) programme.
- In March, interest was paid for the equivalent of US$ 526 million, of which 59% They were in foreign currency. The interest payments on loans from international organizations of US$ 228 million stand out.
- In April, interest was paid for the equivalent of US$ 326 million, of which 62% They were in foreign currency.
- After the record write-off of public debt interest of the equivalent of $19,442 million during 2019 under the previous government, between January 2020 and April 2023 under the current government, interest payments also totaled $25,051 millions of dollars, despite restructuring and debt swaps.
- It is estimated that this year the interest account with the IMF would exceed 2,800 million dollars against 1,721 million dollars in 2022.
In many cases, overdue interest was refinanced, increasing the overall public debt.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.