Nearly one fourth of foreign debt commitments met

* India makes highest foreign financing commitments


The Ministry of Finance and Planning said it has paid up nearly one fourths of the country’s debt commitments for the year.

"The total estimated debt service payments for 2012 is US$ 1,630 million, of which 23 percent has already been paid by 30th April 2012," the Treasury said in its Midyear Fiscal Position Report 2012.

"At the end of April 2012, the total outstanding external debt of the government was US$ 18.9 billion. Total debt service payment from January to April 2012 amounted to US$ 378.4 million. Of this, US$ 216.3 million was for principal payments and the balance US$ 162.1 million was for the interest payments," it said.

"The total commitments made by development partners to Sri Lanka during the period from January to April 2012 was US$ 1,054 million, of which project loans amounted to US$ 774 million and grants amounted to US$ 280 million. Compared to the total grant commitments made at the end of April 2011, remarkably higher grant commitment was recorded by end of April 2012. This was due to the grant assistance extended by the Government of India for the construction of 49,000 housing units in Northern, Eastern, Central and Uva Provinces," the Treasury said.

During this period, India has committed to loans amounting to US$ 443.1 million and grants for US$ 257.3 million. Japan became the second highest contributor with a loan of US$ 162.7 million and a grant of US$ 12.6 million. Netherlands is third with a loan of US$ 102.5 million followed by China with a loan of US$ 32.5 million.

Total foreign financing disbursements during January to April 2012 amounted to US$ 625 million, which included grants amounting to US$ 17 million. Japan is on top of the list with a loan disbursement of US$ 202.4 million and a grant of US$ 5.2 million, followed by China, with a loan of US$ 166.4 million.

China made the highest finance commitment in 2011 at US$ 784.7 million, all loans and no grants, which accounted for 55 percent of the total foreign finance commitments during the year.

India commitment last year was limited to US$ 9.1 million grant.

Total commitments in 2011 amounted to US$ 2,076 million (US$ 1,945 million loans and US$ 131 million grants).

Total external debt service payment in 2011 amounted to US$ 987.5 million which included US$ 357.9 million as interest payments.

Total external debt of the government amounted to US$ 18.6 billion as at end December 2011.

During the last five years, the country’s economy has grown faster than the accumulation of foreign debt which has helped bring down a key ratio; the debt to GDP ratio.

"Foreign debt in terms of GDP has reduced during the last five years, indicating that the country’s GDP has grown much faster in relation to the accumulation of foreign debt. Sri Lanka has maintained the external debt to GDP ratio below the medium category of policy based indicative debt burden threshold of 40 percent," the Treasury said.

The ratio fell from 36.8 percent in 2008 to 31.9 percent in 2011.

The government is floating a US$ 1 billion sovereign bond issue to rollover the country’s maiden issue worth US$ 500 million which matures this October.

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