Published On: Tue, Dec 12th, 2023

National debt stabilizes at the end of third quarter

PHILIPSBURG — St. Maarten’s national debt increased over the first two quarters of 2023 but stabilized more or less at the end of the third quarter. This appears from reviews by financial supervisor Cft. Payment arrears to government entities keep going up.

At the end of 2022, the national debt was 1,122 million guilders ($626.8 million), but in 2023 the debt kept increasing. First to 1,170 million ($653.6 million) and then to 1,287 million ($719 million), before the bleeding stopped at the end of the third quarter when it stood at 1,285 million ($717.9 million) – 44 percent of gross domestic product.

Payment arrears to government entities – predominantly SZV and general pension fund APS –  keep increasing as well. At the end of the fourth quarter in 2022 the arrears were 136 million guilders ($76 million), but they steadily increased in the 2023 until they reached 152 million ($84.9 million) at the end of the third quarter.

These payment arrears are not doing SZV and APS any good. SZV closed 2022 with a deficit of 81 million guilders ($45.2 million), 14 million ($7.8 million) below an earlier projection.

These numbers put the financial position of the government in perspective. The Cft writes in its reaction to the third execution report that the government ended the third quarter with a surplus of 31 million guilders (17.3 million), thereby doing 39 million ($21.8 million) better than the budget.

While the government projects a surplus of 5 million ($2.8 million) at the end of this year, the Cft aims much higher. Based on historical data, the financial supervisor stated that the surplus could be anywhere between 20 and 30 million guilders ($11.2 to $28.2 million).

The Cft furthermore notes that the government’s budget is too low to cover the costs of the government health insurance regulation (OZR) and those of PP-cards. (PP stands for pro pauper, or for the poor, which seems to me a politically highly incorrect name).

The deficits at the funds for healthcare and accident insurance and healthcare insurance for government pensioners remain in the meantime a source of concern. At the end of 2021 the deficit was 345 million guilders ($192.7 million). The government expects to correct this situation with the introduction of a general health insurance system.