Prime Minister announces government move towards prudent debt management strategy
Prime Minister Ranil Wickremesinghe informed the Sri Lankan Parliament last week that the government would introduce a comprehensive secondary market trading platform and a liability management fund for a prudent debt management strategy.
Wickremesinghe made this observation making a statement in the House.
He has said in his statement that policies will be targeted on forward-looking liability management strategies and the funds required by the government will be raised with transparency and predictability.
“Under the medium – term debt management strategy, the detailed strategies of government borrowings will be known in advance to the domestic and foreign debt portfolios,” the Premier has said.
He has said these reforms and future reforms will come into effect under the new Fiscal Liability Management Act that provides legal framework for a prudent debt management strategy.
“With the reforms such as the new Inland Revenue Act, Foreign Exchange Act, Fiscal Liability Management Act, Corporate Intents of the State Owned Enterprises and close monetary-fiscal coordination, we will to steer this country towards robust and judicious management of our financial resources and fiscal framework.”
According to statistics, Sri Lanka was able to sustain a steady GDP growth rate of 4.4 percent and to maintain the unemployment rate at 4.2 percent and to reduce the budget deficit to 5.4 percent.
In 2015, 90.6 percent of the Government total revenue was spent for debt servicing. This amounted to 80 percent in 2016.
“It is an urgent need to draw our attention on spending more than the revenue. We have initiated a process of fiscal consolidation based on revenue generation by passing the Inland Revenue Act, which is already yielding returns,” Wickremesinghe has said.
“We will strengthen the Fiscal Management Responsibility Act affirming our commitment towards fiscal consolidation.”
OSL take:
The introduction of policies targeting forward-looking liability management strategies would help strengthen Sri Lanka’s economy and help the government look at more programmes under its development agenda without being entangled in a debt trap.
| Article Code : | VBS/AT/24102017/Z_2 |