| Abstract [eng] |
This paper raises a discussion on Lithuanian general government debt growth and debt risk management. It is noted that there is a lack of historic research with which to provide constructive analysis of general government debt risk management. Further studies were carried out in related areas, such as analysis of the evolution of public debt (Budrytė, Tursa, 2002), the debt structure (Karazijienė, Sabonienė, 2009), the debt impact on the economy (Fosu, 1996, Kumar, Woo, 2010) and the predictability of public debt (Karazijienė, 2011). This thesis is focused on the analysis of Lithuanian general government debt, the changes to debt structure and the trend analysis of its risks in the years 2006 – 2012. The paper will also include recommendations provided to Lithuania based on Swedish and Danish practice of debt management alongside identification of the trend of debt movement. The analysis in this paper is performed using a combination of sources – literature, statistics, comparative, regression and cluster analysis and the extrapolation method. The evaluation of the analysis suggests that debt growth was determined by the budget deficit, foreign debt and long-term interest rates. More than sixty percent of the government debt amounted to long-term foreign debt due to cheaper foreign borrowing rates from 2006 – 2012 years. Lithuanian borrowing risk is managed through certain limits which do not perform sufficiently. Based upon Swedish and Danish practice, it is recommended to increase the use of financial derivatives in order to manage Lithuanian government debt more effectively. Evaluation of the simulations performed suggest that government debt is expected to increase in the future. |
