According to press reports, President Nayib Bukele’s executive waited until the last moment to pay off his debt following bond buyback processes in September and November 2022, allowing him to save $195.9 million of the $800 to be disbursed.
Experts believe the unwinding of the bonds is a kind of litmus test for the government, which would try not to default too much, especially in a year before the elections. However, some economists argue that this is paying one debt by incurring another.
So far, everything points to debt relief, with Finance Minister Alejandro Zelaya saying the funds to pay off the debt have been secured.
In the 2023 budget, the Treasury Department earmarked $666.9 million to cover debt, which would be backed by loans from regional banks.
According to Bloomberg agency, the funds would come from $450 million in loans made by the Central American Bank for Economic Integration (BCIE) and other entities such as the Andean Development Corporation (CAF) with a $150 million package.
On the other hand, economists like César Villalona state that since Nuevas Ideas took office, the country’s national debt has risen to $5.406 billion, up 27 percent.
The debt was $19,808 million in December 2019 and $25,214 million in November 2022, meaning it has increased from 73.7 percent to 87.7 percent of the country’s gross domestic product (GDP).
According to the Hoy newspaper, the national debt has reached historic levels with the current government.
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