Sri Lanka’s debt repayment is in a comfortable situation as there is no major payment due until October 2020, new Central Bank Governor Professor W.D. Lakshman commented at the Central Bank Monetary Policy Review Meeting held at the Central Bank, Colombo, yesterday.
“Sri Lanka has to pay US$ 4.6 billion for debt servicing in total,” the Central Bank Governor noted. The eminent economist and one-time university vice chancellor also pointed out that Sri Lanka’s economic growth rate dropped to around 1.6% in 2018 but said that this was expected to increase to around 2.8% in 2019 and then increase to around 4% to 4.5% in 2020.
“The Easter Sunday blasts and the weakening of the Sri Lankan rupee, decline of exports, decline of Foreign Direct Investments (FDI) and other issues were the main causes for the low economic growth rate. (Sri Lanka economic growth rate of around 1.6% in 2019 is almost smaller than that of Afghanistan which is constantly facing terrorism issues.)
“The Central Bank predicts that the economic growth rate would pick up to 6% mark thereafter.”
Governor Lakshman said that inflation too would be maintained at around 4% in 2020.
He also said that the debt moratorium offered in the SME sector is been done after a careful study with the Central Bank and assured that it would not have a negative impact for the banking sector.
“The proposal does not require the write-off of capital but to defer it by a year while the interest has been paid to the banks,” the Central Bank Governor added.
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