Costs of servicing government debt in 2009 will rise by over 12%

The government debt will total 10.864,9 million lei on December 31, 2009, down 505.6 million lei since December 31, 2008. Its share in the GDP will decrease from 18.1% to 15.4%, Info-Prim Neo reports. Under the draft budget law for 2009 approved by the Government, the internal debt will fall from 3.629,9 billion lei to 3.511,1 billion lei, while its share in the GDP - from 5.8% to 5%. The external debt on December 31, 2009 will be $841.4 million or by $26.6 million larger compared with the end of 2008 ($814.8 million). But the equivalent of the external debt in national currency will decrease by 386 million lei (owing to the depreciation of the dollar) and, respectively, its share in the GDP will fall from 12.3% to 10.4%. The costs of servicing the government debt will increased by 12.1% in 2009, to 1.384,1 billion lei. The costs of servicing the internally held public debt will rise from 574 million lei in 2008 to 699.7 million lei in 2009. The Ministry of Finance says that the larger costs are due to the considerable increase in the interest rates on state securities over 2007-2008. As a result, the costs of servicing the internal debt will rise during the next years. A sum of 684.4 million lei will be used to service the foreign debt, a 3.6% increase compared with 2008. The Government projected that the GDP in 2009 will be 70.5 billion lei, up 6% on 2008.