Published On: Thu, Jan 11th, 2018

Debt over payment of interest on loans at low interest rates

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The Government has planned to reduce the debt ratio to 70% by the end of year 2020 by reducing government debt by establishing government revenue and creating a fiscal consolidation. The Governor of the Central Bank of Sri Lanka has submitted alternatives to the proposal on the request of the Cabinet of Ministers of Economic Development and various proposals have been made by investors regarding the management of public debt. Some of these suggestions are as follows.

(i) gradually increase the revenue of the state as a percentage of GDP in the medium term Fiscal forecasts;

(ii) the utilization of public investments for selected tasks more quickly selected by the analysis of cost benefits.

(iii) Reducing the borrowing for public investment by attracting the local private sector or attracting foreign investors to public investment.

(iv) Reducing the impact on government expenditure by improving the financial and operational performance of large enterprises.

(v) Issue the most prudent domestic debt.

(vi) Compensation of borrowings obtained at a high rate of borrowings when relatively high interest rates can be obtained.

The Minister of National Languages ​​and Social Integration, Hon. Ranil Wickremesinghe, as the Minister of National Languages ​​and Social Integration, presented the options and alternatives and the challenges faced in the implementation of the accountability management process to the Cabinet of Ministers.

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Debt over payment of interest on loans at low interest rates