The Greek government will repay loans from the Support Mechanism totaling around €8 billion in December.
As revealed in the Draft Budget presented today by the Minister of National Economy Kostis Hatzidakis, the Greek State in December is expected to repay early floating rate loans from the Greek Loan Facility of €7.935 billion, which normally mature in 2026, 2027, and 2028.
It is recalled that the previous loan repayments of € 5,290 million in December 2023 and €€2,645 million in December 2022 have been made.
After these repayments, the general government debt in 2024 is expected to be marginally reduced to €356.5 billion from €356.7 billion in 2023. Compared to the country's GDP, the reduction recorded is larger thanks to the high growth rates of the Greek economy. Thus, in 2024 the general government debt will decrease to 153.7% of GDP from 161.9% in 2023.
In 2025, general government debt is projected to fall to 149.1% of GDP, with its nominal value increasing compared to this year to €361.4 billion.
To service the debt, the budget paid €6.98 billion in interest in 2024, equivalent to 3% of GDP, while in 2025 the related expenditure is projected to decline marginally to €6.9 billion, or 2.8% of GDP.
The borrowing strategy to be followed by the Public Debt Management Agency next year foresees, inter alia, a limited range of issuances due to low financing needs and the early repayment of the loans mentioned above.
In particular, the Draft Budget says that the goal of the lending strategy will be to make sure that the Hellenic Republic continues to issue bonds on the international capital markets, to provide more high-liquidity bonds while keeping as much of their already long physical maturity as possible, to lower the Hellenic Republic's borrowing margins, and to make sure that the Hellenic Republic's behavior as a sovereign issuer is consistent with that of a Eurozone country.
At the same time, the existing positions and characteristics of the Greek sovereign debt portfolio will be exploited to the maximum extent possible in the context of the overall opportunities provided in the short-term part of the European curve.
