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Sri Lanka faces a daunting task of settling massive debt

Sri Lanka faces a daunting task of settling massive debt

Sri Lanka faces a daunting task of settling massive debt repayment in the coming years as it has risky options available for liability management and raising funds through sovereign bonds at commercial interest rates, economic analysts said.



The maturity pattern of the domestic debt reveals that the 50% of the domestic debt are maturing within the next 3 years.

Therefore, the government has launched a program in redeeming short term maturating loans by replacing with longer term maturity debt.

The government expenditure on interest payments in domestic and foreign debt is expected to be Rs. 820 billion in 2018, an increase of 13.1% from Rs 725 billion estimated in 2017. The external debt servicing is likely to hit 30% of GDP by the end of 2017.

The government total debt stock amounted to Rs. 9,387.3 billion at the end of 2016 which resulted in a Government Debt to GDP ratio of 79.3%.

Total external debt increased by 10% in 2016 as against the previous year to USD 27.2 billion. Averaging out for the two years 2015 and 2016, debt grew by 6.2% per year compared to 4.5% average per year in the preceding two years.

(LI NEWS)

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