UNP MP Mangala Samaraweera yesterday charged that a sum of Rs.4 billion had gone out of Sri Lanka as the net outflow from the equity market as a result of the decision by President Maithripala Sirisena to appoint a new Prime Minister.
“This reaction by foreign investors will have a negative effect on the Sri Lankan economy especially in the face of the prevailing global economic crisis,” Mr. Samaraweera said in a statement issued last evening.
He also warned that the yield of the one dollar bond which matures in January next year had shot up to 9.9 per cent from 5.5 per cent earlier. “This will double the country’s debt services,” he said, adding that the increased net outflow of funds will also result in a further devaluation of the rupee.
Additionally, he said the country will face issues in further borrowings to finance the total foreign debt service which stands at a staggering US$ 15 billion at present.
The former Finance Minister, referring to the tax concessions given by the newly appointed regime, pointed out that the government will lose a revenue of
Rs.75 billion as a result of this move. “There would be no option but to increase income tax thereafter,” he said. (Yohan Perera)