The International Monetary Fund has warned Sri Lanka over its increasing foreign debt, which has been growing year-on-year, according to the latest figures.
In its latest assessment the IMF Executive Board concluded that foreign borrowing by the government and banks has left the economy vulnerable and stated, “recent improvements in the trade and current account balances notwithstanding, Sri Lanka remains vulnerable to external shocks.”
Reporting after its latest consultations with Sri Lankan authorities, the IMF added,
“The IMF staff urges caution with respect to external borrowing of Sri Lanka through the banking system.”
Sri Lanka’s external debt was projected at $42.4 billion, showing a steady increase year on year according to figures released by the IMF.
See their full assessment here.
In 2010, Standard & Poor’s, the debt rating agency gave Sri Lanka’s foreign debt a B+ ranking, less attractive than countries such as Greece.
Sri Lanka’s foreign debt less attractive than even Greece's (26 November 2010)
Earlier this year the Sunday Times reported that Sri Lanka’s debt repayments were exceeding its revenue, with the state having to borrow to meet repayments.
Sri Lanka’s debt repayments exceed revenue – Sunday Times (21 April 2014)