Sunday, August 19, 2012
BELIZE HAS A DEBT RATIO OF ABOUT 100% OF GDP
BELIZE HAS A DEBT RATIO ABOUT 100% OF GDP AND IS UNSUSTAINABLE BY ANY IMAGINATION.
2% is about all Belize could and should pay for interest rates on foreign bonds and loans. That is the target set by the Prime Minister's Financial team.
In order to maintain a balanced budget, the government needs to have an average interest rate of about 2%, given that it is running a primary surplus of 2% of GDP and has total debt, including contingent liabilities, of around 100% of GDP, Ross said earlier this year.
Indeed, it is those contingent liabilities from disputed claims of former shareholders in nationalised telecoms and electricity companies that are seen as the true wild card and the reason Belize finds itself renegotiating its debt for a second time in just five years.
The government has said that those claims will be rolled into any restructuring negotiation, though it is not yet clear if the government can reach a resolution with shareholders in the first place.
"Our fear is that this restructuring exercise, far from being orderly and market-friendly, degenerates into a messy and contentious one," wrote Nomura analyst Boris Segura last Tuesday.
Posted by A Professional BEACH BUM retires in Belize! at 5:29 AM