Venezuelan gov't provisions 19.7% of FY2013 budget to repay debt

Higher debts incurred by the Venezuelan Government are having a negative impact on the country's fiscal year 2013 budget, as more money from ordinary expenditures will be needed to meet such liabilities.

As set out in the draft Budget Law for fiscal year 2013, which was submitted to the National Assembly early this week, financial resources to meet domestic and foreign debt in 2013 will total USD 18.1 billion, jumping 43% with respect to 2012 (USD 12.7 billion).

Public debt payments will account for 19.7% of FY2013 budget, in other words, the Treasury will face further obligations next year.

In 2006, authorities indicated that central government expenditure would mainly focus on investment plans and, to a lesser extent, to public debt service.

Indeed, in 2006, as much as 16% of public expenditure was allocated to pay public debt, whereas in 2005 it was 21%. Then, in 2007-2009, public debt service accounted for 10% of public expenditure, amid a decline in oil revenues that forced authorities to raise funds by issuing debt bonds. In 2010, debt continued rising and in 2011-2012 it simply skyrocketed.

Last year, the government's indebtedness stood at USD 20.9 billion and in 2012 it will amount to USD 21.9 billion, an increase that is unavoidably affecting the country's budget.
  
Domestic liabilities

A great deal of the operations of public credits carried out by the Ministry of Planning and Finance has concentrated in the domestic market, being domestic debt payments the highest.

As estimated in the draft Budget Law for fiscal year 2013, domestic debt accounts for 65% (USD 11.6 billion) of the total public debt (USD 18.1). 

marmas@eluniversal.com

Translated by Jhean Cabrera