Sri Lanka’s outstanding debt stock has reached Rs. 4.1 trillion by end October 2009, increasing by more than 20 percent year-on-year latest data from the Central Bank shows.
The outstanding debt stock of the government has increased by 21.6 percent to Rs. 4.1 trillion as at October 2009 from Rs. 3.37 trillion a year ago, data released by the Central Bank last Friday showed.
About 56 percent of this is domestic debt, increasing by 16.22 percent to Rs. 2.33 trillion from Rs. 2.01 trillion. Total outstanding foreign debts amount to Rs. 1.77 trillion growing by 29.63 percent from Rs. 1.36 trillion.
Furthermore, the government’s debt increased by Rs. 83.2 billion during the month of October from Rs. 4.023 trillion in September.
The public sector is also showing signs of healthy growth in bank borrowing whereas the private sector is still in negative territory, according to latest data available for the month of November.
Net credit to the government from the domestic sector increased by 25.1 percent to Rs. 650.5 billion in November 2009, year-on-year.
The domestic banking sector accounted for 67.8 percent of this, reaching Rs. 441.2 billion, an 82.1 percent growth from the previous year. Credit to corporations grew by 74.5 percent to Rs. 73.4 billion, the entire amount coming from the domestic banking sector.
Net credit to the private sector declined by 6.1 percent to Rs. 1.18 trillion with the domestic banking, accounting for 87 percent at Rs. 1.03 trillion.
The fiscal situation is in a precarious position and maintaining fiscal discipline this year would be a challenge, according to economic analysts and the Central Bank, where inflationary money printing and increased domestic borrowings crowding out the private sector are the real threats faced by the economy that is expected to boom after a decades long war.
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