The Bermuda Government will have to borrow another $125 million in the next fiscal year, adding to its $2 billion-plus of outstanding debts.

Of the $800 million that the Government borrowed less than two years ago to see it through multiple years of projected deficits, only $95 million is left, Finance Minister Bob Richards said in his Budget statement.

“Despite significantly reducing Government’s overall deficit and budgeting for a further deficit reduction in this coming year, the money we borrowed at that time is running out,” Mr Richards said.

“That is because, in addition to financing ongoing deficits, we also had to pay off bonds that matured during the period.”

Mr Richards described the national debt as “the biggest risk to Bermuda’s financial independence”, as failure to reverse the trend of soaring debts in the coming years would lead to credit ratings downgrades and empower creditors to force huge public spending cuts. He spelt out his aim to balance the budget within three years.

Debt-servicing costs will total almost $170 million in 2015-16, a rise of 5.4 per cent on the previous year. Mr Richards said this figure was bigger than the expenditure budgeted for any ministry except one.

As of March 2016, gross public debt will stand at $2.31 billion.

“It is my hope that the urgency of working the annual government budget deficit down to zero is clear to all Bermudians because each year we carry a deficit adds to a public-debt load that imposes a dead weight on our ability to meet needs,” Mr Richards said.