Sat, 16 Oct 2021 Today's Paper

MP Wickramaratne generates interest on Sri Lanka’s record cost of interest

30 September 2021 09:16 am - 1     - {{hitsCtrl.values.hits}}

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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

 

FactCheck is a platform run by Verité Research. 
For comments, suggestions and feedback, please visit www.factcheck.lk. 
 

 

 

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  Comments - 1

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

  • roni Friday, 01 October 2021 05:22 PM

    This guy is mostly correct he was a banker,and not an accounting technician. He was one of best Citi Bank Colombo and their Group ever had.


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