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Sri Lanka in ‘financial peril’ – The Economist

The Economist Magazine has ranked Sri Lanka amongst its most vulnerable states that have been worst affected economically by the coronavirus pandemic, as Colombo faces massive debt repayments this year.

In its ranking of 66 states, using four ranking factors, Sri Lanka was ranked 61st place. It only placed higher than Angola, Lebanon, Bahrain, Zambia and Venezuela.

The ranking looked at public debt, foreign debt (both public and private) and borrowing costs (proxied where possible by the yield on a government’s dollar bonds).

“We also calculate their likely foreign payments this year (their current-account deficit plus their foreign-debt payments) and compare this with their stock of foreign-exchange reserves. A country’s rank on each of these indicators is then averaged to determine its overall standing,” the article said.

The countries in the bottom thirty including Sri Lanka are “in distress or flirting with it,” the Economist added.

See the full text of the article here.

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