Lanka Business Online

Sri Lanka to forge ahead despite external pressures: Ravi


Feb 17, 2017 (LBO) – Sri Lanka’s finances are improving despite global turmoil, Brexit and higher interest rates in the US, backed by a Fitch Ratings outlook upgrade, the finance minister said.

“State revenues in 2016 rose to over 13 percent of gross domestic product from around 10 percent and the budget deficit had come down,” Finance Minister Ravi Karunanayake said.

“This prompted Fitch Ratings to update the outlook on Sri Lanka’s sovereign rating to ‘stable’ from ‘negative’.”

Those who increased the debt burden in the country from 1,700 billion rupees to 9,500 billion rupees, question us today as to what has happened to the country, he said.

“We would like to tell them with responsibility that we have been facing all the challenges and are building up a vibrant economy.”

“The then rulers failed to collect state revenue to pay at least the loan installment but we improved the state revenue to considerable levels. Not only that, we took action for development amid all these challenges.”

He said that since 2015 the government has commenced 48 mega development projects.

It is complicated when you are faced with developing a debt-ridden country and a collapsed economy cannot be rebuilt within a day or two, he added.

When questioned about foreigners pulling out of the island’s rupee bond markets, he said that only one player has done so.

“You know very well it is one guy, Templeton Investment Group. They came in at an interest rate of 14.85 percent.”

The group started to buy into the island’s rupee bonds following the payments crisis in 2008/2009.

“These are businessmen and we cannot keep them by force,” he said.

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