Every Lankan shoulders Rs.300, 000 debt: CBSL data

2012-12-24 03:24:51

The average national debt shouldered by each Sri Lankan has risen by 25% to reach Rs. 308,171 (US $ 2,371), from end of last year’s Rs.245, 980 (US $ 1,892), the monthly economic statistics released by the Central Bank of Sri Lanka (CBSL) showed.

Referred to as ‘Debt Per Capita’, in economic terms is calculated as total outstanding government debt divided by the mid-year population of an economy. According to the latest figures by the Department of Census and Statistics, the population in 2012 is 20,277,597.

The total outstanding government debt which stood at Rs. 5,133 billion last December increased by Rs. 1,115.6 billion to reach Rs.6,248.9 billion during the first eight months of this year. The total domestic debt increased by Rs. 449 billion, up 16 percent to reach 3,253 billion and foreign debt by Rs. 666.5 billion, up by 28.6 percent to record Rs. 2,995.8 billion during the period.

According to economists, high debt cost amid slow growth in export earnings (8.3% YoY) against growth in imports (11.2% YoY) in the first nine months could lead the country in to a foreign debt trap situation, as the country might opt for foreign borrowings to service earlier debt, and as a result the foreign debt servicing cost (capital + interest) is also expected to surge substantially.

The Budget 2013 projected a fiscal deficit of 5.8% of GDP proposing to rely heavily on domestic sources (83% of total deficit which amounts to Rs.507.4 billion) to finance the deficit while Rs.143 billion and Rs.445 billion is expected to be incurred as capital repayment and interest respectively.

Nevertheless according to the budget 2012, the government has exceeded the borrowing target for the full year which was Rs. 1,104 billion. This demonstrates the poor fiscal performance where the budget deficit reached to 6.44% of GDP last September whereas the full year target is to achieve 6.2%.

On the banking sector, based on economic indicators released for October 2012 by CBSL’s Statistics Department, the total loans & advances of commercial banks have grown by 26.5 percent YoY in September to reach Rs.2, 205 billion. This is a reduction from the 28.5 percent YoY growth in August.

The banking sector credit grew at a rapid pace in 2011 above 34% and as a result interest rates were raised and 18% credit ceiling was imposed in February 2012 to contain growth and avoid the overheating of the economy. However in a surprised move, CBSL last week cut policy rates by 25 basis points and announced the lifting of the credit ceiling by the year end to probably oil the wheels of economic growth.

  Comments - 8

  • Trehan Munasinghe Monday, 24 December 2012 07:52

    Thank you for the Debt ! and Obata Jayawewa....

    Reply : 1       5

    Fernando Monday, 24 December 2012 12:10

    Dear Government, please subsidize the price of "Raa" as a solution to the debt problem. Let's drink "Raa" and forget about the debt!

    Reply : 0       4

    Naman Monday, 24 December 2012 15:37

    Surely not those Sri Lankans who are patriotic. They have amassed US$ or UK £s in millions.
    Why can't the highly literate Sri Lankans have a civilised Government. What sins have they committed!

    Reply : 0       2

    Sanjay Fernando Friday, 28 December 2012 09:42

    Because the elections are rigged and many villages are not effected by inflation and debt so they do not care which government is ruling. These two combinations ensures that the government in power usually stays in power for decades.

    Reply : 0       1

    bushel Monday, 24 December 2012 18:08

    Not only debt per capita they should work Debt per Goevernrnent minister + MP

    Reply : 0       8

    Karthik Tuesday, 25 December 2012 02:58

    Sir, in which world is MR living allowing his son to import luxuary cars and racing cars without paying any customs duty.
    Is there a way HE and His sibblings declare their assets?. Even our great grand children will not be able to complete loan payments!.

    Reply : 0       4

    purawesiya Wednesday, 26 December 2012 00:44

    Athi garu Mahinda Rajapaksha mathi thumatath ethumage sanuhare G.R,B.R.,C.R,N.R uthumanlatath eatama galapena amathi mandaletath thriwidha rathnththarema pihitayi.
    Thwa tika dohakin unnahela apiwath wikunala dai.Mun passe
    banner ussagena Jayawewa kiyana harak ralak thawamath innawane.Ane ammapa!

    Reply : 0       1

    Hiru-Nikan Wednesday, 26 December 2012 02:54

    Which is higher?. Income or Debt per capita?. A jolly good start for 2013!!.

    Reply : 0       1

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.
Name is required

Email is required
Comment cannot be empty