Nov 10, 2009 (LBO) – Sri Lanka has a “moderate risk” of external debt distress over the 2009-14 period, an International Monetary Fund staff analysis has said.
“All debt indicators are projected to remain below indicative thresholds under the program baseline scenario,” the IMF said.
“This conclusion rests heavily on the satisfactory implementation of the program, especially with regard to the fiscal consolidation measures.
Moreover, the significant cost and roll-over risk of domestic debt adds to the total public debt burden and calls for a pro-active medium-term debt management strategy that aims to reduce costs and risks in the overall public debt portfolio.”
The IMF said Sri Lanka’s stock of public debt has nearly doubled since 2000 mainly as a result of financing persistent primary fiscal deficits.
The government has relied on both external and domestic sources of financing in roughly equal measure until recently when it has had to rely more heavily on domestic debt issuance, particularly in 2008 when international capital markets where all but closed. The analysis, released by the multilateral lender, said slower export growth a