Aisfi says El Salvador “prioritizes” debt repayment over the well-being of the population

Aisfi says El Salvador “prioritizes” debt repayment over the well-being of the population

This content was published on Apr 19, 2023 – 19:17

SAN SALVADOR, April 19 (EFE). – The Central American Institute said that the government of El Salvador “prioritizes” the repayment of its debts “over the” welfare of the population “, sacrificing resources allocated to areas of social development. Wednesday of Fiscal Studies (ISFI).

“If someone revises the approved budget (for the state for 2023), the largest amount of resources goes to paying off the debt. And once again the government says: This is our priority, above the resources for education, health, etc. (…) Economist Ricardo Castaneda said, ISFI’s country coordinator for El Salvador and Honduras told reporters “it seems that any area can be sacrificed except to pay off debts.”

According to the Statistical Registry of Securities Issuances of the Republic of El Salvador’s Supervision of the Financial System (SSF), $1.6 billion in El Salvadoran bonds mature between 2023 and 2025.

According to official sources, the government has paid “in full” and interest on 2023 bonds for $800 million that came due this month, and El Salvador “only” has to pay $347 million of bond debt of $800 million originally, which matures in 2025.

The economist pointed out, during an event in which a comparative analysis of state budgets for the years 2022 and 2023 was conducted, that by 2023, debt repayment will be the largest item in the budget, i.e. a quarter of the budget above the resources of the ministries. such as education and health.”

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El Salvador’s Legislative Assembly, with a wide majority in favor of the government, approved in December 2023 the state’s general budget of more than $8,902 million, an increase of 11.7% over that approved in 2022 and with a financing deficit of $1,139 million.

Castaneda indicated that comparing “what was implemented in 2022 with respect to what was approved for 2023, is a different situation. Most institutions have increased their resources, but the question is whether what was allocated in the budget is what will actually be executed? Perhaps the answer is no “.

By 2022, he noted, “what the government has done is also prioritize debt repayment.”

“It doesn’t seem to matter what you have to adjust or what you have to cut, even the resources for areas of social development,” he said.

In a statement, Aysevi notes that “in 2023, the largest item in the budget was the payment of public debt service, which includes interest and amortization, as it reached $2,134.9 million, much higher than $1,502.5 million for education or $1,131.1 million for health.”

According to the authority, “nearly a quarter of the 2023 budget is allocated to repaying the public debt.”

According to figures released by the Central Reserve Bank of El Salvador, the country’s public debt reached $25,350.12 million at the end of 2022. EFE

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