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Last Updated : 2024-04-23 21:35:00
In his statement, the MP states that (1) public sector debt as a percentage of GDP was 109.7% in 2020, (2) this is the highest public debt in Sri Lanka’s history, and (3) if sovereign bonds had not been undervalued public debt would exceed 113% of GDP. To evaluate this claim, FactCheck.lk consulted the Central Bank of Sri Lanka (CBSL) Annual Reports.
Claim 1: According to the CBSL Annual Report 2020, central government debt in 2020 amounted to 101% of GDP. In combination with SOE foreign project loans (2.1% of GDP) and government guaranteed debt (6.6% of GDP), total public sector debt amounted to 109.7% of GDP, confirming the MP’s first claim.
Claim 2: FactCheck.lk consulted the CBSL Annual Reports for all years where Sri Lanka’s central government debt exceeded 100% of GDP. Central government debt exceeded 100% of GDP on 7 occasions. The Annual Reports did not publish data on total public debt prior to the year 2000. As per the published data on total public debt, 109.7% of GDP in 2020 is the highest post-independence public debt reported for Sri Lanka, confirming the MP’s second claim.
Claim 3: The MP alludes to the fact that CBSL uses market value to determine the outstanding external debt liability of Sri Lanka’s International Sovereign Bonds (ISBs). As of end 2020, total ISB liability (at market value) accounted for in Sri Lanka’s public debt was USD 11,868 million. However, the actual liability that Sri Lanka had to repay creditors is based on the face value of the ISBs, which was USD 14,050 million (as at end 2020). If the face value (instead of current market value) of outstanding ISBs was considered Sri Lanka’s total debt would increase by 2.7% of GDP. In effect, increase the total debt figure to 112.4% of GDP (see Exhibit 1). The figure 113% claimed by the MP is very close to the correct figure.
Therefore, we classify his statement as TRUE.
*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.
The CBSL has reported that the public sector debt is 109.7% of the GDP. This is the highest it has ever been in history. If we disregard the government’s undervaluation of sovereign bonds, this figure will exceed 113% of the GDP.
EXHIBIT 1: CALCULATED SRI LANKA PUBLIC DEBT 2020 AS A SHARE OF THE GDP
FactCheck.lk and Publicfinance.lk are platforms run by Verité Research. For comments, suggestions and feedback, please visit www.factcheck.lk.
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