Bermuda’s public debt ratio is set to reach ten percent by the end of the year — and each resident’s share of the debt is predicted to rise from $4,300 to $9,900.

The Department of Statistics released a report on the debt this morning, explaining that public debt was a government obligation that results from borrowing when tax revenue is insufficient to finance Government expenditure.

The report said that increased borrowing is popular during recessionary periods because it provides the Government with funds to stimulate investment and employment.

Today’s report shows that Bermuda’s public debt to gross domestic product ratio in 2008 was seven percent compared to four percent in 2007.

“The public debt picture, while not alarming, is starting to exhibit a predictable pattern,” the report said. “The ratio is lower than the debt ratio of Bermuda’s major trading partners and other Caribbean countries.

“However considering that this ratio previously stood at four percent in 2007 and with a projected decline in GDP for 2009, the debt to GDP ratio is estimated to climb to ten percent at the end of the year,” the Department of Statistics release stated.

“Therefore, each resident’s share of the public debt is expected to grow from approximately $4,300 to $9,900 in the two-year span 2007-2009.”

* See the full story in tomorrow's Royal Gazette.