PARIS: France aims to keep steady the amount of bonds it issues next year compared to this year despite a larger state budget deficit and higher redemptions, the public debt management agency said on Monday.
The Agence France Tresor said it planned to issue 195.0 billion euros ($229.5 billion) of medium and long-term bonds next year, net of buy backs, the same level as this year.
The state deficit to be financed is set to rise to 98.7 billion euros in the 2019 budget from 81.3 billion euros this year, due mainly to one-off items.
In particular, a payroll tax credit scheme is to be transformed into a permanent tax cut with an impact of more than 20 billion euros, while a change in the way taxes are collected will also have an effect.
In addition to the bigger deficit, AFT said bond redemptions were set to rise to 130.2 billion euros next year from 116.6 billion this year.
AFT said it expected to finance the bigger deficit while keeping bond issuance steady mainly by increasing the stock of outstanding treasury bills by 15 billion euros, while the amount of public funds held on deposit is also expected to rise by 11 billion.
Meanwhile, AFT projected interest rates on its benchmark 10-year bond are seen rising from 1.4 percent at the end of this year to 2.15 percent by the end of 2019.
It also said it expected debt service costs to rise from 41.7 billion euros this year to 42.1 billion euros in 2019.
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