Growth factors of the gross debt

During the year, the gross debt increases for the following reasons:

• the budgetary deficit, if any. A budgetary surplus reduces gross debt;
• government investments in fixed assets (e.g. roads);
• government investments in its enterprises. These investments are made through advances, cash contributions or by allowing the government enterprises to keep part of their earnings to finance their own investments;
• changes in some of the government’s other asset and liability items (e.g. accounts payable and accounts receivable).

During the five years leading up to the pandemic, strong economic performance, fiscal consolidation and deposits in the Generations Fund contributed to a gradual reduction of the debt as a proportion of GDP.

Despite the substantial increase in the debt in 2020-2021 due to the pandemic, the gross debt‑to‑GDP ratio is again decreasing and has been decreasing since 2021‑2022.

As at March 31, 2022, the gross debt burden stood at 41.8% of GDP, which is below the pre‑pandemic level of 43.5% of GDP as at March 31, 2020.

The gross debt burden will decrease to 40.4% of GDP as at March 31, 2023.