Almost two-thirds of the debt owed by PetroCaribe St. Vincent has not been entered into the government’s public debt statistics, the International Monetary Fund (IMF) says.
The IMF, however, said on Monday that it has included the total figure in its projection.
The IMF, which on Thursday concluded its Article IV consultation, said that at the end of January 2016, the debt of PetroCaribe St. Vincent to Venezuela stood at EC$183 million or 8.7 per cent of GDP.
However, only EC$71 million of the EC$183 million is recorded as government debt.
“The other EC$112 million (5.3 per cent of GDP) has not been entered in the government’s public debt statistics, but is included in IMF projections,” the IMF said.
Under PetroCaribe, Venezuela’s oil initiative with several Caribbean nations, countries import oil from Caracas and pay for a portion upfront and keep the remainder as a low-interest 20-year loan.
The loan monies are used to fund social programmes.
The IMF, however, said that due to lower oil prices, PetroCaribe financing flows have declined considerably more recently, and are expected to be reduced further in 2016.
The government has said that it owes EC$140 million under PetroCaribe, a figure which the opposition has doubted.
The opposition New Democratic Party has repeatedly accused the government of hiding the PetroCaribe debt.
However, the figures quoted by both the government and the IMF are significantly lower than the almost EC$1 billion quoted by Bank of Nova Scotia, which the NDP says it is inclined to believe.
The IMF noted that SVG’s public debt has increased steadily since 2008, adding that the Government has committed to reduce it through fiscal consolidation.
The public debt rose from 57 per cent of GDP at end of 2008, since launching the EC$729 million international airport project, to 74 per cent of GDP at end of 2015.
The 74 per cent of GDP takes SVG’s debt ratio up to the median for Eastern Caribbean Currency Union (ECCU) countries.
The IMF noted that this is taking place during a challenging period of global economic financial crisis and damage caused by three natural disasters in 2010, 2011 and 2013.
It said the PetroCaribe agreement has represented an important financing source for the government.
In presenting the Budget in February, Prime Minister and Minister of Finance, Ralph Gonsalves, said that preliminary figures show that at Dec. 31, 2015, the total outstanding public debt stood at $1.566 billion.
The figure was 76.9 per cent of the nation’s gross domestic product (GDP) and a decrease of 0.3 per cent when compared to the debt of EC$1.571 billion at the end of December 2014
The IMF said St. Vincent and the Grenadines has committed to reducing its public debt to 60 per cent of GDP by 2030, in line with the agreement among ECCU countries.
Gonsalves said in his budget presentation that the ratio of public debt as a percentage of GDP has risen moderately, which compares favourably with other member countries of the ECCU.
“Still, we intend to arrest this trend once the period of high capital expenditure associated with the airport and disaster rehabilitation tapers off, within the context, too, of an expanding GDP,” he said.