June 01, Colombo: Sri Lanka's total government debt as a percent of GDP has declined over the past decade reaching a peak in 2002.
The total government debt including foreign and domestic debt amounting to US$ 52 billion was 78.3 percent of the GDP in 2013 according to the recently released Annual Financial Report for 2013.
Sri Lanka's total debt to GDP ratio reached an all-time high of 105.6 percent in 2002, and since then averaged 88.2 percent until reaching a record low of 78.3 percent in 2013 after recording a slight increase of 0.7 percent in 2012 from 2011.
Sri Lanka's foreign debt in 2013 reached US$ 22.6 billion (Rs. 2.96 trillion) and domestic borrowing amounted to US$ 29.4 billion (Rs. 3.83 trillion).
In 2013, the Foreign Debt mainly composed of project loans amounting to US$ 14.9 billion and US$ 7.8 billion of non-project loans which include the proceeds of the international sovereign bonds.
Total foreign debt in 2013 accounted to 43.6 percent of the total debt. The foreign debt to GDP ratio declined to 34.1 percent from 36.5 percent in 2012 mainly due to the lower reliance on foreign debt in 2013.
The domestic debt mainly consisted of Treasury Bonds which amounted to US$ 18.8 billion.
Total domestic debt in 2013 amounted to 56.4 percent of the total debt reflecting more reliance on domestic financing in 2013.
According to the Finance Ministry, the reduction of the government debt to GDP ratio to a risk free level is the main objective of the government’s debt management strategy and Sri Lanka, as announced in the 2014 Budget, aims to reduce the debt to GDP ratio below 65 percent by 2016.