Sri Lanka among lowest debt burdened

Lalin FERNANDOPULLE

Sri Lanka is one of the lowest debt burdened countries, revealed the publication on Public Debt Management in Sri Lanka-2008.

The publication on Public Debt Management in Sri Lanka was launched recently at the Central Bank.

Sri Lanka's outstanding debt to GDP ratio declined to 81.1 percent in 2008 from 85 percent in 2007.Public debt was 106 percent in 2004 recording the highest annual growth.

Superintendent of Public Debt, Central Bank, C.J.P. Siriwardene said most Debt Burdened Indicators (DBI) have shown that Sri Lanka is a low debt burdened country. The DBI measures the level of the burden of external debt to the economy.Two aggregate ratios are used comparing total outstanding external debt (DOD) with DNP and XGS.

Siriwardene said the DOD/GNP declined to 33 percent last year from 37 percent in the previous year which is an improvement on debt sustainability in Sri Lanka.

Sri Lanka's total debt stock last year increased by Rs.536 billion and stood at Rs. 3,578 billion at the end of the year.

The depreciation of the rupee resulted in the increase of the debt stock by Rs. 131 billion. "Last year was a challenging year for the Public Debt Department (PDD).

The debt management task was made difficult due to challenges in the domestic and international markets", Siriwardene said.

He said a debt management strategy alone is not sufficient, unless the confidence of investors and stakeholders are sustained.

The PDD adopted new strategies last year to raise funds.

The local Treasury bill market was opened to foreigners with the objective of expanding the investor base and lowering the pressure on the local market.