Reuters : Sri Lanka borrowed over 25%more last year than in 2014, Finance Minister Ravi Karunanayake said on Wednesday, blaming the high cost of refinancing loans he said were raised by the previous government without parliamentary approval.
Karunanayake told parliament that total government borrowing rose 25.6% in 2015 to Rs. 1.74 trillion.
That included a 23% rise in domestic borrowing, to Rs. 1.19 trillion ($8.15 billion), and a 32% jump in foreign borrowing, to Rs. 556.4 billion.
“We had to obtain more loans to repay the loans taken by the previous government without informing the parliament and the cabinet,” Karunanayake said. “Of those loans, 89.9% was to repay the expenses of the last government and rest is for the capital expenditure.”
Prime Minister Ranil Wickremesinghe said on 8 March that former president Mahinda Rajapaksa’s government had not included Rs. 1.04 trillion rupees in borrowing by state enterprises in the national debt, which was estimated at Rs. 8.48 trillion at the end of 2015.
Wickremesinghe said the government owed Rs. 9.5 trillion ($65.6 billion). He also announced plans to raise value-added tax and reintroduce capital gains tax to help tackle Sri Lanka’s high debts ahead of talks on a $1.5-billion loan it is seeking from the International Monetary Fund.
A downgrade of Sri Lanka’s credit rating by Fitch to B+ with a negative outlook and an outlook change to negative by Standard & Poor’s this month have intensified scrutiny of the island nation’s public finances.
The $82.2 billion economy faces a balance-of-payments crisis after the Central Bank burned through one-third of its foreign exchange reserves in the 15 months to January defending the rupee currency.
Last year’s budget deficit is meanwhile expected to have increased to 7.2% of gross domestic product, compared with a target of 4.4 %.
On Wednesday, Wickremesinghe said the government is still undecided on how to repay an estimated Rs. 365 billion debt run up by state-run SriLankan Airlines.
Govt. borrows $ 375 m via Development Bonds
The issue of Sri Lanka Development Bonds (SLDBs) for US$ 150 million has been oversubscribed with total bids received amounting to US$ 380.73 million, the Central Bank said on Wednesday.
Karunanayake told parliament that total government borrowing rose 25.6% in 2015 to Rs. 1.74 trillion.
That included a 23% rise in domestic borrowing, to Rs. 1.19 trillion ($8.15 billion), and a 32% jump in foreign borrowing, to Rs. 556.4 billion.
“We had to obtain more loans to repay the loans taken by the previous government without informing the parliament and the cabinet,” Karunanayake said. “Of those loans, 89.9% was to repay the expenses of the last government and rest is for the capital expenditure.”
Prime Minister Ranil Wickremesinghe said on 8 March that former president Mahinda Rajapaksa’s government had not included Rs. 1.04 trillion rupees in borrowing by state enterprises in the national debt, which was estimated at Rs. 8.48 trillion at the end of 2015.
Wickremesinghe said the government owed Rs. 9.5 trillion ($65.6 billion). He also announced plans to raise value-added tax and reintroduce capital gains tax to help tackle Sri Lanka’s high debts ahead of talks on a $1.5-billion loan it is seeking from the International Monetary Fund.
A downgrade of Sri Lanka’s credit rating by Fitch to B+ with a negative outlook and an outlook change to negative by Standard & Poor’s this month have intensified scrutiny of the island nation’s public finances.
The $82.2 billion economy faces a balance-of-payments crisis after the Central Bank burned through one-third of its foreign exchange reserves in the 15 months to January defending the rupee currency.
Last year’s budget deficit is meanwhile expected to have increased to 7.2% of gross domestic product, compared with a target of 4.4 %.
On Wednesday, Wickremesinghe said the government is still undecided on how to repay an estimated Rs. 365 billion debt run up by state-run SriLankan Airlines.
Govt. borrows $ 375 m via Development Bonds
The issue of Sri Lanka Development Bonds (SLDBs) for US$ 150 million has been oversubscribed with total bids received amounting to US$ 380.73 million, the Central Bank said on Wednesday.
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