Press briefing of Cabinet Decision taken on 2018-01-09

Public Debt Management

- The Government has planned to make a deceleration of the public debt accumulation through the increase of Government revenue and a Government financial consolidation process to bring down the Public Debt Ratio up to 70% of the Gross Domestic Product (GDP), by the end of year 2020. The Governor of the Central Bank of Sri Lanka (CBSL), on the request of the Cabinet Committee on Economic Management (CCEM) has submitted the available alternatives and different proposals have also been submitted by the Investment Houses for a more favourable public debt management. Some of such proposals are given below:

(i) Gradual increase of public revenue as a percentage of the GDP as set out in the Medium-term fiscal projections.

(ii) Public investments for immediate beneficial activities selected through cost - benefit analysis.

(iii) Reducing the borrowing for public investments by the attraction of local private sector or foreign investors for public investments.

(iv) Improving of the financial and the operational status of the major state- owned business enterprises and thereby reducing the impact on public expenses.

(v) Careful articulation of domestic debt issuance.

(vi) Set off the loans taken at a high interest rate from the loans taken in instances where loans can be obtained relatively at a lower interest.

Hon. Ranil Wickremasinghe, the Prime Minister in his capacity as the Minister of National Policies and Economic Affairs, submitted these alternatives and proposals and the challenges to be faced while implementing the Liability Management Process to the Cabinet and the Cabinet took note of the facts.