Go to (on this page): content, search field of menu.
U bevindt zich op: Home › News › 09
Continuing falling national debt
National debt as a percentage of Gross Domestic Product (GDP) is set to fall further in 2009. Following an increase in interest rates, interest costs for the State will slightly increase. This can be concluded from the national debt budget, chapter IXA of the central government budget, which is presented to Parliament today.
By the end of 2009, national debt is expected to amount to 202.7 billion euro (2008: 206.2 billion euro). This makes 32.6% of GDP (2008: 34.8% of GDP). Therefore the decline of national debt will be continued. The national debt makes up 82% of the so-called EMU-debt, the number that is relevant in a European comparison.
Interest costs for the State are slightly increasing in 2009, mostly the result of higher interest rates in 2009 compared with 2008. The interest costs comprise interest on the national debt and other interest paid, including interest paid on accounts of entities participating in the central treasury. The interest costs (less interest income) will amount to an estimated 11.6 billion euro in 2009, (2008: 11.3 billion euro), of which 9.8 billion euro is interest on the national debt, (2008: 9.6 billion euro).
The State finances its debts at the lowest interest costs possible, while maintaining an acceptable risk for the budget. The risk relates to the State incurring unacceptably high interest costs following unexpected increases in interest rates. In 2008 a new risk framework is implemented. In the risk framework a 7-year benchmark with a steady redemption profile will be replicated. In principle, the issuance policy will remain unchanged. Interest rate swaps will be used to convert the issuance to the benchmark. More information about the risk framework is available on the website of the Dutch State Treasury Agency (www.dsta.nl).
In 2009 the evaluation of the central treasury activities will be finalised. In the central treasury system public entities hold interest-bearing funds at the state-treasury. Credits or loans at favourable conditions are also possible. The bundling of public money contributes to a more efficient management of public funds.