Finance Ministry to inform P’ment on strategy to tackle debt

Wednesday, 31 May 2023 00:40 - - {{hitsCtrl.values.hits}}

Cabinet Co-Spokesman and Minister Bandula Gunawardena

Cabinet Spokesman and Minister Bandula Gunawardena said yesterday that the Finance Ministry will inform its strategy for debt restructuring framework and plans to increase the Government debt ceiling in the coming weeks.

“Sri Lanka can no longer raise money by borrowing from the international markets or by printing. Thus, the Treasury will announce its new strategy to run the Government activities smoothly,” he said at the post-Cabinet meeting media briefing yesterday. He also said that the Government’s revenue was not sufficient to meet the basic monthly expenditures that include public sector wages, pension, Samurdhi and social welfare initiatives, whilst servicing bilateral debts.

“There is no other option than raising the Government’s debt ceiling,” he added. Gunawardena also expressed that the debt restructuring framework to negotiate with creditors would be ready by September.

“By securing the $ 2.9 billion Extended Fund Facility from the International Monetary Fund, we managed to get a breath of air for the economy.

Now we need to assure the debt restructuring framework will be ready by September to save the economy from dying,” he stressed.

The Cabinet Co-Spokesman also claimed no political leader will be able to provide a solution to the miserable economic strait, emphasising that the only answer Sri Lanka could survive is via technical and management skills.

In October, the Cabinet of Ministers approved an additional Rs. 663 billion in borrowing capacity, pushing 2022 Government’s total credit ceiling to over Rs. 4,500 billion.