March 9 (SeeNews) - Montenegro's finance minister Darko Radunovic has said the government aims to reduce public debt to below 57.5% of the country's gross domestic product (GDP) in 2020.
In this way, Montenegro will meet the euro convergence criteria under which the debt-to-GDP ratio must not exceed 60% of GDP, Radunovic said in a video file posted on YouTube earlier this week.
The government plans to issue Eurobonds to refinance existing government debt maturing in 2020 and 2021 and it has already received offers for the refinancing of debt worth 250 million euro ($307.5 million) maturing in 2019, Radunovic said.
"We will tap the international market and try to sell Eurobonds worth 500 million euro. The experience we had with the first tranche of Eurobonds issued with the guarantee of the World Bank, was that we got a 12-year maturity, a grace period of four years and interest rate was equal to a six-month Euribor plus 2.95 percentage points," Montenegrin public broadcaster RTCG quoted Radunovic as saying on Thursday.
Under the existing market conditions, the government expects to reduce significantly the interest rate it pays, Radunovic said in the video file.
Earlier this week, Montenegro's government said it plans to propose to increase the deficit in this year's state budget to 139.14 million euro ($172.1 million), equivalent to 3.16% of the estimated gross domestic product (GDP). A deficit equivalent to 2.6% of GDP is envisaged in the budget adopted in December.
The change will reflect the government's plans to refinance debt under more favourable conditions, given the positive stance of the financial markets towards Montenegro, the government said.
($ = 0.812975 euro)