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Foreign debt manageable – CB Governor

Published

6 years ago

2020/12/2

by Sanath Nanayakkare

Doomsayers had predicted that the country’s debt burden would be unmanageable, but that was not the case when one took the alternative economic indicators into account, Central Bank Governor Prof. W.D Lakshman said yesterday at the inauguration session of Sri Lanka Economic Summit 2020, held on a virtual platform.

Prof. Lakshman said that he particularly felt obliged to touch upon the current controversies surrounding Sri Lanka’s fiscal deficits and the current level of its debt.

“There are arguments that Sri Lanka’s fiscal deficits have been excessive and the debt levels are at unmanageable levels, but let me attempt to expand on this aspect in terms of alternative thinking in economic theory,” he said.

“Several countries including Japan, Singapore, and the United States have debt levels far exceeding their GDP. Firstly, this shows that even such high levels of debt could be sustainable when domestic debt is the predominant component in the debt portfolio. It can be shown through alternative indicators that even foreign debt is more manageable than doomsayers indicate.

“The ratio of government’s foreign non-concessional debt to GDP is around 23%, and the remainder is either domestic debt that can be rolled over or dealt with upon long term concessional financing. The annual foreign debt service payments as a percentage of export earnings and remittances stand at around 12% in ‘business as usual’ years such as 2018.

“With the adoption of a fiscal consolidation path from 2021 and the increased emphasis on domestic debt when it comes to financing budget deficits, the aforementioned indicators will improve further. The fears surrounding debt sustainability, therefore, indeed appear unfounded.”

Referring to widespread concerns on import restrictions, foreign trade and foreign economic relations the Governor said: “Import restrictions on non-essential goods working along with low oil prices have provided the country with a saving of US$ 4 billion in import expenditure in 2020. This saving is almost equivalent to the foreign currency debt service payments we settled during the year.

“Import restrictions have also provided an opportunity for our local enterprises to gather steam within the domestic market and to evaluate possibilities of expansion abroad – a mechanism used in all successful growth stories of the world. Those who argue for so-called ‘debt restructuring or debt reprofiling’ must realise that this means reforms of austerity. In my view, Sri Lanka is already undergoing some austerity, but on our terms. This is evident when the ongoing programme of import compression is considered.

“Sri Lanka is introducing ground-breaking reforms to improve its domestic production economy, enhance exports and reduce foreign debt dependence. It is commendable that Sri Lanka is following this approach without being prompted by any foreign agency, while continuing to honour all its financial obligations.”

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Sun directly overhead Kalpitiya, Talawa, Sinharagama, Galkadawala, Nachchaduwa, Padikaramaduwa, Gomarankalla and Verugal about 12.10 noon today (01)

Published

4 hours ago

2026/09/1

Priyan

The sun is going to be directly over the latitudes of Sri Lanka from 28th of August to 07th of September due to its apparent southward relative motion.

The nearest places of Sri Lanka over which the sun is overhead today (01) are Kalpitiya, Talawa, Sinharagama, Galkadawala,
Nachchaduwa, Padikaramaduwa, Gomarankalla and Verugal about 12.10 noon.

News

SJB asks what Speaker intended to do about allegations against CJ

Published

6 hours ago

2026/09/1

Sahan Weerasooriya

… stresses need for action if claims were proved false

Samagi Jana Balawegaya (SJB) MP Dayasiri Jayasekera has sought a clarification from Speaker Dr. Jagath Wickremaratne regarding several allegations against Chief Justice Preethi Padman Surasena, in Parliament, recently.

In a letter dated 31 August, Jayasekera has asked the Speaker whether he received any documentary evidence from MPs in support of the allegations at issue. The SJB MP has also inquired about the steps taken by the Speaker regarding the allegations and whether the issue had been taken up with the relevant agencies authorised to probe the assets of the CJ and members of his family.

MP Jayasekera confirmed that he had raised the issue with the Speaker, following the accusations relating to the high profile X-Press Pearl case, which received significant public attention in the recent past.

The Kurunegala District MP has also asked the Speaker whether the latter contemplated taking action in case the allegations were proved false to ensure that the dignity of the Chief Justice and the judiciary was safeguarded.

Among the issues raised by MP Jayasekera are the acquisition of valuable property in Colombo by the CJ’s son, the circumstances in which he was able to procure the property, as well as accusations regarding the CJ’s birth certificate, marriage certificate and birth certificates of his children.

News

Navy Chief attends strategic-level discussions in Delhi

Published

6 hours ago

2026/09/1

Sahan Weerasooriya

Navy Chief Vice Admiral Damian Fernando held a series of strategic-level discussions with senior Indian defence and military officials during a three-day official visit to New Delhi. He returned on Sunday (30).

Navy Headquarters said that the two sides discussed ways to further strengthen maritime security cooperation between the two Navies in support of security in the Indian Ocean region. They also exchanged views on expanding training opportunities and capacity-building programmes, as well as other areas of bilateral importance.

During his visit to New Delhi, Vice Admiral Fernando also held official discussions with India’s Chief of Defence Staff, General N.S. Raja Subramani, Defence Secretary Rajesh Kumar Singh and Vice Chief of the Air Staff, Air Marshal Ashutosh Dixit and defence industry representatives. Discussions at these meetings focused on bilateral defence cooperation, joint training programmes, and opportunities to enhance air and maritime cooperation in the Indian Ocean Region.

As part of efforts to further expand cooperation in naval training and professional development, Vice Admiral Fernando also met Vice Admiral Sameer Saxena, Flag Officer Commanding-in-Chief of India’s Southern Naval Command, at its headquarters in Kochi, Kerala. The two sides discussed existing naval training exchange programmes and opportunities for introducing and expanding further training initiatives. The meeting followed the Commander of the Sri Lanka Navy’s visit to INS Dronacharya, the Indian Navy’s training establishment where he previously completed the Long Gunnery and Missile Course.