Opposition Leader Mahinda Rajapaksa has warned that the debt crisis created in this country by the Government has now reached a critical stage.
In a media statement Rajapaksa said that the total Government debt which was Rs. 7.39 trillion at the time this Government came into power in January 2015, had skyrocketed to Rs. 12.64 trillion by the end of July 2019 – an increase of 71%.
He says the high proportion of foreign currency commercial loans in the debt taken by the Government increases the risk to the country.
“The international ratings agency Moody’s issued a warning recently with regard to this matter,” he said.
Rajapaksa said that from January 2015 to date, the Government has taken a staggering 26 billion US Dollars in foreign currency commercial loans through Sri Lanka Development Bonds, Sovereign Bonds, Syndicated Loans, Currency Swaps and the like.
“Foreign currency loans have to be repaid in foreign currency. Hence the debt burden increases automatically when the value of the US Dollar increases in relation to the Rupee. The value of the US Dollar which was Rs.131 when this Government came into power, has increased to Rs.183 today. The depreciation of the currency from 2015 up to the end of 2018 alone, had increased the Government’s debt burden by Rs.1,709 billion. The most salient feature of the debt that the present Government has taken on, is that none of it has been utilised to develop the country but only to meet the day to day expenses of the Government,” he said.
He also said that the Government has not built anything of lasting value or anything that would generate an income from the staggering 26 billion USD that they took in the form of foreign currency commercial loans since January 2015.