Sri Lanka plans 16% increase in borrowing in 2018
Sri Lanka plans to increase its overall government borrowing by 16 percent in 2018 to Rs.1.8 trillion (US $12 billion), a document showed this week.
Finance Minister Mangala Samaraweera has also sought Cabinet approval for spending of Rs.3.98 trillion next year, up 10.5 percent from its estimate for this year, government data showed.
Finance Ministry officials, however, said the government would stick to its medium-term budget deficit target of 3.5 percent of GDP by 2020.
The government last month said it would cut spending to stick to its 2017 budget deficit target of 4.6 percent of Gross Domestic Product (GDP) and compensate for a fall in revenue.
The government said last week that higher debt repayments next year will reduce its ability to increase economic growth.
The government has blamed ‘colossal borrowing’ by the previous administration for a spike in its debt-servicing costs. The previous government borrowed heavily to rebuild infrastructure after a 26-year civil war ended in 2009.