Unprecedented surge in interest payments in 2022

Based on the Central Bank data, Verité Research yesterday pointed out that Sri Lanka’s interest payments had reached their highest levels in 2022.

This increase in interest payments suggests a significant debt burden on the government. The ratio of interest payments to total government revenue has surged from 35 percent in 2015 to a striking 78 percent in 2022. 

Notably, there was a substantial rise in interest payments between 2019 and 2020, with payments escalating from 47 percent to 71 percent, mainly due to a substantial fall in government revenue, as a result of the tax cuts in late 2019 and early 2020. 

This increase in interest payments suggests a significant debt burden on the government.