Sri Lanka is among countries with a rising interest burgen, the International Monetary Fund (IMF) warned this week.
“Many economies saw rising interest burdens, which exceeded 20 percent of total revenue in 2018 in Egypt, Pakistan, and Sri Lanka,” the IMF said in its latest Fiscal Monitor report.
“As a result, emerging market economies have become vulnerable to rollover risks if they face large financing needs.”
The IMF urged countries like Argentina, Sri Lanka, China and Turkey to end tax exemptions and improve administrative efficiency in order to generate increased revenues.
“Looking across low‑income and developing countries, we can see that public debt levels have increased significantly in recent years in many of those countries,” the IMF's Anna Ilyina said at a press conference following the release of the report.
“In fact, the median level of debt is now close to 50 percent of GDP. And the number of countries that are now either at high risk of debt distress or are already in debt distress is high. It is over 40 percent.
“And that is a significant increase, compared to only five years ago, when it was only 20 percent. So these issues are very much on the minds of policymakers in those countries.”