Central government financing requirement for 2020 and 2021
The Economic Survey, December 2020, will be published December 18th.
The estimates of the central government net financing and financing requirement for 2020 and 2021 can be found in table 1 below. The net financing requirement is estimated in The Economic Survey, December 2020, to be DKK 197 bn. in 2020 and DKK 12 bn. in 2021.
The estimate of the net financing requirement for 2020 has been reduced by DKK 51 bn. compared to the estimate in The Economic Survey, August 2020, and has been increased by 84 bn. for 2021. The changes are notably due to revised estimates on firms’ postponement of tax revenue from 2020 to 2021, and to the payment of the last two weeks of holiday allowances in 2021.
The financing requirement (gross) is estimated in The Economic Survey, December 2020, to be DKK 329 bn. in 2020 and DKK 247 bn. in 2021. This is a reduction by DKK 45 bn. in 2020 and an increase by DKK 45 bn. in 2021, primarily due to the changed estimates of the net financing requirement.
The financing requirement is met by debt issuance or by drawing on the central governments account at Danmarks Nationalbank.
The financing strategy is published on the website of the government debt management office.
|Table 1. Net financing requirement and central-government financing requirement for 2020 and 2021|
|August 2020||December 2020|
|DKK bn. 1)||2020||2021||2020||2021|
|Net financing requirement||248||-72 4)||197||12|
|Repayment of long term debt 2)||81||74||91||76|
|Repayment of short term debt 3)||24||195||24||155|
|Net purchase of state owned funds||-8||-14||-8||-13|
|Net purchase of social mortgage bonds||29||19||24||19|
|Financing requirement||374||202 4)||329||247|
1) Rounding may cause component sums to deviate from totals.
2) Incl. payments from the central government in cross-currency swaps and buybacks of long term debt with maturity date beyond 2020.
3) Repayment of short-term debt corresponds to the outstanding amount of Treasury bills and commercial paper in the beginning of the year.
4) The estimate for 2021 from August 2020 has been corrected, as the expenditures on the budget proposal for 2021 were to high by approximatively DKK 7 bn. in 2021.
Source: The Economic Survey, December 2020
Originally published at https://en.fm.dk/news/news/2020/december/central-government-financing-requirement-for-2020-and-2021/