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“Current govt. forced to borrow heavily to repay previous debts”

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Senior Professor Wasantha Athukorala of the Department of Economics and Statistics at the University of Peradeniya revealed that the previous government had borrowed approximately Rs. 800 billion per month from the domestic market without any repayment plan. The current Government is compelled to borrow to repay these loans, he added.

Professor Athukorala emphasised that the current Government is paying off a significant amount of debt accumulated through Treasury Bills and Bonds by previous administrations. The Government will have to borrow to repay Rs. 4,859 billion in Treasury Bills and Bonds maturing over the next year.

Responding to allegations of large-scale borrowing by the current Government since assuming office, Professor Athukorala stated that the majority of the funds the Government is borrowing now is to settle previous loans. The former governments had no concrete plans to repay these loans, which forced the current Government to continue borrowing to meet these obligations.

Highlighting the scale of previous borrowings, he said that around US$ 12 billion of the US$ 17 billion borrowed through International Sovereign Bonds was taken between 2015 and 2019. This accounts for nearly 70 percent of the total foreign borrowings during that period. With Sri Lanka’s credit rating downgraded by agencies like Fitch, the country has lost the ability to borrow from foreign markets.

He also noted that even though foreign loans have decreased, Sri Lanka is still borrowing from bilateral and multilateral institutions. Even if foreign loans are restructured, the country will eventually have to repay them. Domestically, the government raises funds through Treasury Bills and Bonds every week to meet its financial needs.

Looking ahead, the Government will need to repay Rs. 3,774 billion in Treasury Bills from November this year to November next year. Additionally, Rs. 13,237 billion in Treasury Bonds must be settled by March 2045, and Rs. 1,125 billion in Bonds will mature next year. In total, Rs. 4,859 billion will mature between this November and the next.

These loans, borrowed from local banks and financial institutions, cannot be avoided. Failure to repay them could plunge the banking system into crisis. Therefore, the Government will continue to borrow from the market every week to meet the maturing debt obligations.

While previous governments borrowed to repay loans without any long-term plan to reduce the debt burden, the current Government needs a strategy to address this ongoing debt. Each month, the Government borrows approximately Rs. 400 billion to meet debt repayments. From January to August of this year, the Government borrowed about Rs. 800 billion per month from the domestic market, compared to last year.

Professor Athukorala stressed the importance of establishing a plan to reduce borrowing gradually. Over the next five years, the Government should aim to reduce monthly domestic borrowings to around Rs. 200 to 250 billion to ensure sustainable debt management. Such a plan would help avoid future debt crises. He also observed that while previous governments often wasted borrowed money, there are signs that wasteful spending is decreasing under the current administration, which is a positive development.

(Daily News)

(Except for the headline, this story, originally published by Daily News has not been edited by SLM staff)

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Man jailed over phone ringing in courtroom dies in custody

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A man who was imprisoned for 14 days after his mobile phone rang inside the Embilipitiya Magistrate’s Court has died while in custody under controversial circumstances, prompting allegations from his family and triggering investigations by prison authorities.

The individual, who had reportedly arrived at the court premises to post bail in a case filed over traffic violations, was detained for allegedly violating the decorum of the courtroom when his phone rang during proceedings.

Prison authorities claim he died of a sudden illness while in custody. However, his relatives have accused prison officials of assaulting him, alleging that the post-mortem examination had revealed that the deceased suffered brain damage from a blow to the head with a blunt object and internal bleeding caused by an injury to the left side of his chest.

Prisons Media Spokesperson Gamini B. Dissanayake said that a full internal investigation is underway into the incident, in addition to a police inquiry.

(adaderana.lk)

(Except for the headline, this story, originally published by adaderana.lk has not been edited by SLM staff)

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President invites Vietnam’s Vingroup to invest in SL

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President Anura Kumara Disanayake, who is currently on a state visit to Vietnam, extended an open invitation to Vietnam’s leading conglomerate, Vingroup, to explore investment opportunities in Sri Lanka’s real estate and tourism sectors.

While congratulating the Vingroup for their achievements and for building a diversified global brand, President Disanayake invited Vingroup to consider investing in Sri Lanka’s real estate and tourism sectors. He further emphasized that Sri Lanka is pleased to facilitate the creation of a smooth and enabling environment for their investments.

The President made these remarks during a business engagement with Vingroup at their Headquarters in Hanoi, yesterday evening (May 04) where he met with Vice Chairman and the CEO of the Vingroup Nguyen Viet Quang and the delegation.

President Disanayake emphasized Sri Lanka’s strategic geographic position, progressive infrastructure development and the government’s commitment to fostering a conducive environment for foreign investors, particularly in high-potential sectors such as tourism and real estate.

Vingroup Joint Stock Company (Vingroup JSC), formerly known as Technocom Corporation, was founded in 1993 in Ukraine. Today, Vingroup is one of Vietnam’s largest and most respected private enterprises, operating as a multi-sector corporation with a focus on three core pillars: industrials & Technology, Real Estate & Services and Social Enterprises.

Minister of Foreign Affairs, Foreign Employment and Tourism, Vijitha Herath also participated in the discussions.

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Complaint filed on Halloluwa’s claim against President AKD

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A complaint was filed with the CID last night (May 04), requesting an urgent investigation into a claim made by former Director of the National Lotteries Board – Thusitha Halloluwa.

Halloluwa had alleged that President Anura Dissanayake had made a large financial investment in Greece.

The relevant complaint was submitted at midnight yesterday by the Attorney-at-Law Akalanka Ukwatte, with President’s Counsel Upul Kumarapperuma.

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