Fri, 29 Mar 2024 Today's Paper

Easter attacks pose no major threat to SL’s debt repayment ability: IMF

17 May 2019 10:33 am - 0     - {{hitsCtrl.values.hits}}

A A A

The recent Easter Sunday bombings and the resultant economic slowdown don’t pose a major threat to Sri Lanka’s debt refinancing capacity, according to the International Monetary Fund (IMF).

“We don’t see any major risk to the authorities’ refinancing plans at this stage based on the latest developments,” IMF’s mission chief for Sri Lanka, Manuela Goretti, said in a teleconference with reporters in Colombo yesterday.

She said market pressure on the country in the aftermath of the horrific terror attack by a homegrown jihadist group with links to the Islamic State that killed more than 250 people, had remained contained.

“There have only been a small increase in international sovereign bond spreads—about 40 basis points. The domestic bond market has remained stable. The rupee has also stabilized and has recorded a slight appreciation this week.”

Sri Lanka successfully repaid two large bond issuances fully amounting to the US $ 1.5 billion in January and April this year. The next large international bond repayment is due in October 2020.

Goretti said Sri Lanka could go back to tapping international capital market for funds as soon as the country’s security situation is stabilized. 

“Sri Lanka remains open to international capital markets, and we are confident that as soon as the security situation in the country is stabilized, the authorities will go back to tapping the markets for funds.
“We don’t see any major risk at this point given the profile of debt maturities and market conditions in the country,” she said.

The main three global rating agencies downgraded Sri Lanka following the October 26 political crisis last year, saying that the political uncertainty had increased the island nation’s debt refinancing risks. After the resolution of the political impasse in December, Sri Lanka in March this year successfully raised the US $ 2.4 billion from international capital markets through US $ 1 billion 5-year and US $ 1.4 billion 10-year issuances.

Meanwhile, Goretti said IMF was maintaining this year’s 3.5 percent growth forecast and the medium-term five percent forecast on Sri Lanka despite the terror attacks that disrupted the country’s economic activity extensively. 

She said it was too early to assess the impact of the recent shocks on Sri Lanka’s economy as official data or clear information was not yet available.

“So it would be speculative for us to revise our growth forecast at this juncture. But as we always do, we will continue to monitor the developments and will update our macro framework once we have more data points and additional information,” she said.

A recent Reuters poll of 10 analysts predicted that Sri Lanka’s economic growth could hit an 18-year low this year on the Easter Sunday bombings. The Finance Ministry estimates the hit on the tourism industry to be around the US $ 1.5 billion. Sri Lanka made the US $ 4.4 billion in tourism earnings last year. (Indika Sakalasooriya)


Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

  Comments - 0

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment





Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

VAT increase: SOUNDs death knell for publishers, readers

Though the Government imposed VAT (Value Added Tax) on vegetables and other e

How female change-makers are driving Sri Lanka’s energy saving platform

Saving energy has become more of a responsibility than a habit in today’s c

A dull Ramadan awaits Muslims amidst the Soaring Cost of Living

In the coming days, Muslims across the world will welcome the Holy Month of R

New wildlife underpass to curtail HEC

As of February 2024, Sri Lanka lost another 38 elephants as a result of the H