The Bank of Israel reports that the government's gross debt as a proportion of GDP is continuing to rise, reaching 105% in 2003, up from 102% in 2002. The government debt/GDP ratio has is 16% higher than in 2001.
Bank of Israel figures published to day indicates that the government's gross domestic and external debt reached NIS 520 billion as of December 31, 2003, 5.6% higher in real terms than on December 31, 2002.
The Bank of Israel states that the increase in the government's gross debt during 2003 was mainly due to a surge in its domestic debt, while its external debt was unchanged in shekel terms.
The government's domestic debt reached a record NIS 390 billion in 2003. Domestic debt rose by 28%, or NIS 85 billion, in 2000-03, and by 82%, or NIS 176 billion, in 1995-2003. The proportion of domestic debt as a percentage of the total government debt rose from 73% in 2000 to 75% in 2003.
The Bank of Israel warns against a further increase in the interest payments the government will have to pay on its debts. Interest payments amounted to 5.1% of GDP in 2003, 2.5-3 times the average OECD level. Interest payments rose by 18%, or NIS 4.3 billion, in 2003 to NIS 28.4 billion.
Interest payments rose by 75%, or over NIS 12 billion, in 1995-2003. Interest payments on the domestic debt rose to NIS 22 billion in 2003, 77% of the total interest on the government debt. Interest payments on the domestic debt rose by 90%, or NIS 10.5 billion, in 1995-2003. Interest payments on the external debt remained unchanged at NIS 6.4-6.6 billion a year in 1999-2003.
Published by Globes [online] - www.globes.co.il - on March 1, 2004