The Minister of State noted that the international community is optimistic about Sri Lanka’s debt restructuring, but some parties in Sri Lanka have refused to see it with confidence for their political goals.
Minister of State for Finance Sehan Semasinghe said this at a press conference held yesterday (02) at the Presidential Media Centre.
Minister of State Chehan Semasinghe who gave further comments here,
Now there is good news regarding debt restructuring, which is necessary to rebuild the country’s economy. On June 26, agreements and contracts were signed with the countries of the Bilateral Creditors Group and the Peris Corporation as official creditors.
Also, an agreement was reached with China Exim Bank on the same day. Thus, we have fulfilled two essential points regarding debt restructuring. Moreover, the international community is optimistic about the restructuring of this debt in Sri Lanka. But some in this country refuse to see the debt restructuring process as gospel for political purposes.
It must be said that this is a very sad thing as a country. At first we thought that some people were saying this about the work we did because of lack of understanding. But it is now clear that those comments were motivated by narrow political motives. When President Ranil Wickremesinghe addressed Parliament today, it was clearly demonstrated by the way the opposition parties behaved. So people should be clear about the status of those who mix politics and economy and disturb the progress of the country. Some people present opinions about the situation in countries like Ghana, Ecuador and Argentina.
But we need to understand the differences in debt restructuring between low-income and middle-income countries. Debt restructuring in our middle-income country is more complex than debt restructuring in a low-income country.
But compared to middle income countries, Sri Lanka is leading in this debt restructuring. Also, we are ready to demonstrate the 03 key points of debt restructuring through action. Accordingly, our lenders have extended the repayment period from 2024 to 2027. We have been given an opportunity to utilize the benefit of about 05 billion dollars during that period for the benefit of the people of the country.
Also, by 2032, government debt should be reduced to 95% of GDP. The total funding requirement should be reduced by 13% between 2027 and 2032. External debt service should also be reduced to 4.5% in the period 2027-2032.
We have now agreed on a specific debt restructuring to meet these 03 targets. Accordingly, all uncertainty has now been removed to achieve debt sustainability for this country. Through this economic management, inflation in Sri Lanka has been reduced from 70% to 1.7%. In the country’s treasury bill auction, the interest rate on one-year treasury bills has reached 10%,” Minister of State for Finance Chehan Samesinghe added.
