The government will request from both Indian and China to defer the re payment of loan installments due to them State Minister of Information and Communication Technology, Lakshman Yapa said yesterday.
He said that Prime Minister Mahinda Rajapaksa who was in India has already made this request to Prime Minister of India, Narendra Modi. “The Government will now make a similar request to the Chinese government.” Yapa said that the government was in a position to pay these installments but if they do, there would be some impact to the economy where people will feel the punch. “We want to avoid this and that is why the government is making this request to both China and India to differ Lanka’s loan installments for a period of three years.” The Minister explained that Sri Lanka’s total debt from 2005 to 2015 was Rs. 7,400 billion and most of the loans were used to fight the war and add key infrastructure like highways and building of ports and airports in Sri Lanka.
“However in contrast the Yahapalana government obtained loans to the value of Rs. 14,000 billion and no major development took place. “The present government has to now honor these loans and this is why the government is making requests to both China and India to defer them until such time the economy stabilizers.”
Yapa said that the International Monetary Fund has already given thumbs up to Sri Lanka and have stated that they are happy in the manner in which the government is leading the economy. They have also predicted the economic growth rate to pick up from under 2% in second quarter of 2019 to 3.7% by end of 2020. IMF staff mission to Sri Lanka estimated the Real GDP growth at 2.6 percent in 2019 but expected the GDP to bounce back in 2020 to 3.7 percent on the back of the recovery in tourism while inflation to remain at around 4.5 percent.
“The international investors are having confidence in Sri Lanka and more FDI too would start to trickle to Sri Lanka soon which will help to stabilize the economy.”
Though there will be a dip of foreign exchange earnings to Sri Lanka due to the Coronavirus and drop in arrivals, recovery is expected soon.
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