Minister says no more debt despite fiscal compliance

Marco Archer, Minister of Finance & Economic Development

(CNS): With the Cayman Islands on track to meet all of the requirements of the Public Management and Finance Law and the Framework for Fiscal Responsibility by the end of this financial year, government could start borrowing again but Finance Minister Marco Archer said there would be no more debt in the next financial year. In a letter addressed to the premier, James Duddridge, the British junior minister with responsibility for the territories, said he was also keen to learn how the Cayman government was going to refinance the existing debts, including the 2019 bond.

Acknowledging the 90 day’s worth of operating expenses in the government accounts, Duddridge made it clear in the letter that he was still watching Cayman’s debt levels. “I am sure that you will agree that robust debt management strategy is an integral part of good financial planning,” he wrote.

However, Archer told CNS that government was not intending to increase the debt, which is expected to be within the required levels on 30 June. Achieving all the targets paves the way to return control back to the local government, so it would not have to seek approval from the UK for the budgets before tabling them in the Legislative Assembly. But Archer said all future budgets would still need to be in compliance with the ratios that have been achieved.

“We have no plans to borrow but if we did, we would be allowed to borrow up to the point that our debt repayments would not cause our debt service ratio to exceed 10% of central government revenues. But we have no plans to borrow in the 2016-17 fiscal year,” he stressed.

Mac: PPM can’t take credit for fiscal compliance