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Sri Lanka is confident it will not repay its debt, says FM Basil Rajapaksa


“By the year 2024, we are confident that we can increase reserves and put debt on a permanent basis,” he says.

Sri Lanka is confident that it will not fail repaying his debts and will work to gradually improve the quality of its foreign exchange reserves, Minister of Finance Basil Rajapaksa said on Saturday, November 13, 2021, just one day after presenting the 2022 annual budget.

Read more: Sri Lanka sells $ 1 billion to India

The government will reduce budget cuts by 8.8% of gross domestic product by 2022, the finance minister said in a statement Friday. The target for the 2021 reduction was adjusted to 11.1%.

“Sri Lanka has never existed unchanging in its history and the record will be preserved, ”says Rajapaksa.

“Although part of our reserves have been borrowed but we will be making gradual savings from next year until 2024. By 2024, we are confident that we can expand our reserves and put debt on a sustainable level,” he added.

The big problem

Debt repayment is one of the major challenges facing Sri Lanka with foreign currency falling to $ 2.27 billion at the end of October.

Mr Rajapaksa said remittances and tourism, which are the main source of revenue, have all been affected by the COVID-19 epidemic and it has been difficult to attract investors.

“But we want to reduce lending. I guarantee $ 1.54 billion by July 2022 will be repaid,” he added.

Researchers do not know whether announcements in the budget are enough to boost confidence in investors, accounting agencies and market participants.

“Overall, the budget is unlikely to be a major source of income and does not clearly show how it hopes to meet its future debt or how it is expected to address growing stocks,” said Trisha Peries, chief financial officer. at Frontier Research.

“There is no clear evidence of a to the IMF, while continuing to look for bilateral and international support, which is in line with the Central Bank policy of Sri Lanka, “he added.

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