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Wednesday, December 04, 2024

Total public debt exceeds $ 100 b, raising concerns about debt sustainability

 


Domestic debt rises to $ 60 b

04 Dec 2024 | By Imesh Ranasinghe The Morning

Sri Lanka’s domestic debt saw a net increase of $ 2.4 billion in the third quarter as the government continues to rely on the domestic debt market with the total domestic debt closing in at $ 60 billion, Finance Ministry data showed.

According to the debt bulletin for the third quarter published by the Finance Ministry, Sri Lanka’s domestic debt rose to $ 59.9 billion from $ 57.4 billion at the end of June.

The total stock of outstanding Treasury bills increased by $ 404.7 million to $ 13.1 billion, while the total stock of outstanding Treasury bonds increased by $ 2.29 billion to $ 44.2 billion.

Furthermore, the total outstanding public debt has increased to $ 103.7 billion in the third quarter from $ 100.6 billion in the second quarter, while the total outstanding external debt increased by $ 716 million to $ 38.2 billion.

Commercial debt represents a significant portion of the government’s external debt which amounted to 38%, followed by multilateral debt (33%) and bilateral debt (29%).

Also, about 85% of the Commercial category debt consisted of international bond issuances (ISBs) and the rest from the term financing facilities (Syndicated loans).

“The Asian Development Bank (ADB) and the World Bank are the major multilateral creditors representing over 87% of the total multilateral debt,” the Finance Ministry said, adding that under bilateral debt, 60% of its debt is represented by non-Paris Club countries while about 40% from Paris Club countries.

Meanwhile, the government has managed to clear local loans in foreign currency amounting to $ 240 million in the third quarter.

Further, the Finance Ministry said that 67% of the government’s external debt consists of the instruments obtained at fixed interest rates, whereas 31% at floating interest rates.⍐

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