SL’S public debt would have soared past Rs.12,000bn by end-december 2018
Even after 11 weeks from the end of the year 2018, the government has still not disclosed the amount of public debt, as at December 31, 2018. It is primarily because of that deliberate concealment of economic data from the public by the government, that all economic analysts have to rely upon their own ‘estimates’ and calculations as to the extent of indebtedness of the country as at December 31, 2018.
In that context, from the existing official and publicly available data, the following estimate of public debt could be prepared.
The Central Bank official data indicates that the depreciation of the rupee from October 1, 2018 to December 31, 2018 was Rs.13.84 (i.e. 184.70-170.86). Further, the foreign debt as at September 30, 2018 was officially reported at Rs.5,469 billion by the Central Bank, which amounted to approximately US $ 32.3 billion.
On that basis, the amount that would be added to the rupee value of the foreign debt stock by December 31, 2018, due to the rupee depreciation, would amount to a further Rs.447 billion: (i.e. US $ 32.3 billion x Rs.13.84).
Accordingly, the public debt as at December 31, 2018 could be estimated at Rs.12,207 billion, after adding a further modest amount of Rs.100 billion as estimated new net borrowings during the three months to December 31, 2018.
At the same time, the public debt could also be estimated through another method, by referring to the official summary of the budget (as per page 54 of the Budget Speech 2019 document) presented by the finance minister.
In that summary, the ‘revenue plus grants’ is reflected as an amount of Rs.2,025 billion, which amount is officially stated by the Finance Ministry as being 14.1 percent of the provisional GDP. On that basis, the provisional GDP for 2018 could be worked out as Rs.14,361 billion.
Further, the government debt is officially reported as 84 percent of the provisional GDP on page 56 of the same official Budget Speech, which means the public debt as per the government’s own calculations would amount to Rs.12,063 billion.
If therefore (to be generous to the ‘Yahapalanaya’ government), the lower of the above two estimates is taken for purposes of the exercise to estimate the public debt, the public debt as at December 31, 2018 could be reasonably estimated as Rs.12,063 billion, until the final numbers are released by the Central Bank.
The public debt as at December 31, 2014 was Rs.7,391 billion (as officially reported in the successive Central Bank reports from 2014 to 2017). Since the public debt as at December 31, 2018 can now be professionally estimated at Rs.12,063 billion, the estimated increase in the public debt over the four years ending December 31, 2018, under the ‘Yahapalanaya’ government, amounts to Rs.4,672 billion (Rs.12,063 billion – Rs.7,391 billion). A simple calculation shows that such increase represents an increase of 63.2 percent over that of the public debt as at December 31, 2014.