Central government financing requirement


Update: The financing requirement for 2018 has been revised upwards by 3 bn. kr. The recently announced financing strategy for 2019 remains unchanged.

Updated estimates of the central government net financing and financing requirement are presented in table 1 below. The financing requirement is covered by debt issuance or by drawing on the central government account at Danmarks Nationalbank.

The financing requirement for 2018 has risen by 21 bn. kr. to 128 bn. kr. due to larger repayments of long term debt. The Ministry of Finance expects a financing requirement of 144 bn. kr. for 2019. This is a downward revision by 6 bn. kr. 

The financing strategy is managed by Danmarks Nationalbank and can be found on the website of the government debt management office.  

Tabel 1. Net financing requirement and central-government financing requirement
  2018 2019
DKK bn. 1) August December August December
Net financing requirement 1 -1 8 9
Repayment of long term debt 2) 74 95 112 104
Repayment of short term debt 3) 33 33 30 30
Financing requirement 107 128 150 144

1) Rounding may cause component sums to deviate from totals.

2) Incl. payments from the central government in cross-currency swaps and net bond purchase of state owned funds. From 2019 it also includes social housing mortgage bonds.

3) Repayment of short term debt corresponds to the outstanding amount of Treasury bills and commercial paper in the beginning of the year.

Source: Economic Survey, December 2018.

The budgeting of social housing mortgage bonds has been changed from 2019 onwards. In the annual budget act, transactions will appear on § 42 Government debt repayment instead of § 40 Re-lending. This means that the net financing requirement no longer includes social housing mortgage bonds. They will be part of repayment of long term debt like the other state funds managed by Nationalbanken, and therefore still be included in the total financing requirement. The change will have effect from 2019 onwards and doesn’t affect the 2018 estimates.