Aug 13, 2012 (LBO) – Loans from Sri Lanka’s banking system fell to 13.5 billion rupees in June 2012, from 41.8 billion a month earlier with state credit no longer pressuring the banking system, while private citizens’ credit remained positive, official data showed. Total loans from commercial banks to private borrowers rose 19.0 billion rupees to 2,234.9 billion rupees in June up 31.6 percent from a year earlier, slowing from a 33.5 percent growth in May.
Credit to the state including state enterprises fell 5.5 billion rupees 1,285.9 billion rupees.
Bank credit to the central government fell 14.5 billion rupees to 1,010.3 billion rupees in June, up 37.5 percent from a year earlier, down from a 44.7 percent growth shown in May.
Credit to state enterprises continued to grow in June by 9.0 billion rupees to 275.6 billion rupees, up 77.8 percent from a year earlier but slowing from 107.7 percent from May.
Sri Lanka ran into a balance of payments crisis from mind 2011 due to heavy state borrowings, especially by energy enterprises which were using credit to manipulate tariffs.
Amusingly however, authorities and pro-establishment economist blamed car imports falling back to Mercantilism. Imports (and trade deficits) are secondary symptom of de