According to the Ministry of Finance (MoF), the total public debt stock as of June 30, 2024 stood at Nu 285 Billion (B). The debt stock comprises external debt of about Nu 264B and domestic debt of Nu 21B.
However, according to the Ministry, the total public debt stock declined by Nu 7.91B accounting to 2.7% from the preceding quarter. The external debt stock increased by Nu 2.58B accounting to 1.0% and the internal debt declined by Nu 10.5B, that is 32.8%, resulting in an overall decrease in the total public debt stock.
For instance, the government debt of Nu 240B, that is about 91.3% of the total external debt, accounts mainly in borrowings for budgetary activities, hydropower projects, and loans availed by the government and on-lent to public corporations.
Corporate debt pertains to borrowings directly contracted by public corporations. It amounts to about Nu 12.8B that is about 3.8% of the total external debt, according to the Ministry.
Similarly, the standby Credit Facility with the Government of India (GoI) amounts to Nu 10B and it makes up 3.8% of the total external debt where it is classified as a Central Bank’s debt.
Concurrently, the hydropower debt as of June 30, 2024 stood at Nu 167B, constituting 63.4% of total external debt and 62.6% of the Fiscal Year (FY) 2023-2024 Gross Domestic Product (GDP) estimate.
According to the Ministry, the hydro debt comprises the debt stock of six hydropower projects of Mangdechhu Hydroelectric Project Authority (MHPA), Puna-I, Puna-II, Nikachu, Dagachu, and Basoschu (upper stage & lower stage).
The non-hydro debt stood at Nu 96B as of June this year, constituting 36.6% of total external debt and 36.2% of estimated GDP, the Ministry stated.
Similarly, the INR-denominated debt stood at Nu 172B, accounting for 65.4% of total external debt, of which 88.4% was hydropower debt.
The Convertible Currency (CC) debt stock stood at Nu 91B, accounting for 34.6% of total external debt. While, the Ngultrum value of CC debt stock increased by about Nu 2.5B, that is, 2.9% owing to new loan disbursement for the ongoing projects and depreciation of BTN against USD.
As always, the GoI remains the country’s largest creditor. As of June 30, 2024, 64% of Bhutan’s external debt was owed to GoI, followed by 17% to Asian Development Bank (ADB) and 14% to International Development Association (IDA) and about 5.3% were owed to International Fund for Agricultural Development (IFAD), Japan International Cooperation Agency (JICA), amongst others.
The external debt also includes borrowings for financing infrastructure development, such as rural electrification, agriculture, road connectivity, trade infrastructure, and urban development, education and health sectors, according to the Finance Ministry.
Similarly, the domestic debt as of June 30, 2024 stood at Nu 21B, accounting for 8.0% of the estimated GDP and 7.5% of total public debt stock.
The domestic debt primarily consists of an overdraft outstanding of about Nu 379 million (M) and Government bonds totaling Nu 21.09B.
Meanwhile, a series of Government bonds were issued including a 10-year Government bond of Nu 700M in February 2021; a 10-year Government bond of Nu 3000M in February 2022; a 7-year Government bond of Nu 1500M in April 2022; a 12-year Government bond of Nu 4000M in June 2022, a 10-year Government bond of Nu 1250M each in January and February 2023.
The government also issued a 9-year Government bond of Nu 3B in May 2023, a three year Government bond of Nu 2.9B in September 2023 and a two year Government bond of Nu 4B in November 2023.
By Sherab Dorji, Thimphu
