In his statement, the MP states that (1) 70% of government revenue is spent on interest on loan repayments, and (2) Lebanon is the only country in the world to pay higher interest than Sri Lanka as a percentage of national revenue. To evaluate this claim, FactCheck.lk consulted the Central Bank of Sri Lanka (CBSL) Annual Reports and the World Bank World Development Indicators database.
Claim 1: According to the CBSL Annual Report 2020, Sri Lanka’s interest on loan repayments as a percentage of government revenue has risen to 72% in 2020 from 47.7% in 2019. This increase arises from the increase in interest payments and a reduction in government revenue in 2020. Therefore, the 70% figure cited by the MP reflects the 2020 share of interest payments.
Claim 2: The World Bank World Development Indicators database is currently available for 117 countries (including Sri Lanka) up to 2019. In that, Sri Lanka had the second highest interest payments as a percentage of national revenue ratio at 47% in 2019; with Lebanon having the highest at 51%. This confirms the MPs claim.
The MPs first claim is correct for 2020 and the second claim is correct for 2019, the latest year for which a full set of cross-country data is available. Therefore, we classify his statement as TRUE.
Note: In 2020 Lebanon defaulted on its debt and therefore incurred only 18% of revenue interest payments. Therefore, in 2020, with 72% interest to revenue ratio Sri Lanka has become the country with the highest share of interest to government revenue. (See Exhibit 1)
Exhibit 1: Interest to Revenue Ratio among countries with large debt levels
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