Shehan Semasinghe

Sri Lanka’s government debt stock has seen a notable reduction of 2.76%, amounting to Rs 803.2 billion, as of April 30, 2024. This decrease brings the total debt from Rs 29,150.4 billion on December 31, 2023, down to Rs 28,347.2 billion.

A significant reduction was observed in the foreign debt stock, which fell by 9.2% (Rs 1,113.4 billion), declining from Rs 12,076.7 billion to Rs 10,963.3 billion. This reduction can be attributed to the strengthening of the exchange rate, which has positively impacted the country’s foreign debt obligations.

Conversely, the total domestic debt stock experienced a slight increase of 1.8% (Rs 310.2 billion), rising from Rs 17,073.7 billion to Rs 17,383.9 billion. The increase in domestic debt is a result of the government’s efforts to manage the budget without resorting to central bank financing.

State Minister of Finance Shehan Semasinghe commented on the developments, stating, “The reduction in our foreign debt stock is a direct result of the strengthening exchange rate, which has allowed us to manage our international obligations more effectively. At the same time, the slight increase in domestic debt reflects our commitment to managing the budget responsibly without over-relying on central bank financing. These steps are crucial for maintaining economic stability and ensuring long-term fiscal health.”

These adjustments in debt levels reflect the government’s ongoing efforts to stabilize the economy and manage fiscal responsibilities effectively. The reduction in foreign debt stock and the careful increase in domestic debt highlight a strategic approach to maintaining economic balance while addressing financial obligations.

Debt Category December 31, 2023 (Rs billion) April 30, 2024 (Rs billion) Change (Rs billion) Change (%)
Total Debt Stock 29,150.4 28,347.2 -803.2 -2.76%
Foreign Debt Stock 12,076.7 10,963.3 -1,113.4 -9.2%
Domestic Debt Stock 17,073.7 17,383.9 +310.2 +1.8%

Key Points:

  • Total Debt Stock: Reduced by 2.76% (Rs 803.2 billion).
  • Foreign Debt Stock: Reduced by 9.2% (Rs 1,113.4 billion).
  • Domestic Debt Stock: Increased by 1.8% (Rs 310.2 billion).
  • Reasons for Changes:
    • Reduction in foreign debt due to the strengthening of the exchange rate.
    • Increase in domestic debt due to budget management without central bank financing.

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