The United National Party (UNP) yesterday charged that the Government has failed to indicate a revenue enhancement model needed to fund debt repayment for 2021 in the Budget, pointing out that $ 5.2 billion worth of debt was due for repayment next year.
“The Government’s Budget for 2021 has failed to indicate how they will raise the necessary revenue to meet these repayments,” the UNP stated.
Issuing a press release the UNP urged the Government to be transparent with public finances and to ensure the timely and accurate release of official economic figures which may have an impact on the country’s credit rating. The Finance Ministry has put debt repayment for 2021 at $ 4.5 billion and said multiple times that the Government has the situation under control.
“UNP is concerned by the lack of transparency on the part of the Government regarding the country’s public finances. The delay in releasing the second and third quarter economic figures will have an adverse impact on the country’s credit ratings,” the UNP warned, arguing that the present Government could only meet this year’s debt repayment obligations due to savings and fiscal consolidation policies of the previous Government.
“The Government has already overseen the country’s credit rating downgraded twice this past year. If the Government continues to refuse to release the necessary economic indicators for the second and third quarters, the international credit rating agencies will be forced to estimate based on external figures,” the Opposition party warned. The Census and Statistics Department has said results will be released in December, citing calculation challenges posed by COVID-19.
“The Government of Sri Lanka was able to meet the necessary debt repayments for 2020 due to the foreign exchange raised and consolidated by the UNP Government. Prior to President Rajapaksa taking over the Government in November 2019, the country’s foreign reserves stood at $ 7.6 billion (Rs. 1.4 trillion). This allowed the Treasury officials to meet the debt requirements for this year,” the UNP claimed.
According to the UNP, the overreliance on borrowing without a clear plan to raise revenue to meet the existing debt obligations by the present Government has placed the country on a dangerous path of possibly defaulting on due payments. The UNP says that the 2021 budget did not indicate a clear debt sustainability model for 2021.
“We urge the Government to act in a responsible manner when dealing with the country’s public finances, and not betray the trust placed in them by the public,” the UNP said.
(Source: Daily FT)