“By 2024, we are confident that we will be able to increase reserves and keep debt at a sustainable level,” he says.
Sri Lanka is confident it will not make a mistake his loan repayment and will work to gradually improve the quality of its foreign exchange reserves, Finance Minister Tulsi Rajapaksa Said on Saturday, November 13, 2021, a day after presenting the annual budget for 2022.
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The Finance Minister, in his speech on Friday, had said that the government will reduce its budget deficit to around 8.8% of GDP in 2022. The deficit target for 2021 was revised to 11.1%.
“Sri Lanka never mistake in your history And that record will be maintained,” Mr Rajapakse said.
He said, “Even a part of our reserves is borrowed, but we will gradually improve the quality of reserves from next year till 2024. By 2024, we are confident that we will be able to increase the reserves. and will be able to infuse loans at a sustainable level.”
main challenge
Debt repayment is one of the key challenges facing Sri Lanka, with foreign exchange reserves dwindling to $2.27 billion by the end of October.
Mr Rajapaksa said remittances and tourism, which are the top two sources of dollar inflows, have both been hit by the COVID-19 pandemic and it has become difficult to attract investors.
“But we want to reduce borrowing. I guarantee that $1.54 billion will be repaid by July 2022,” he said.
Analysts are not convinced that the announcements in the Budget are enough to instil confidence among investors, rating agencies and market participants.
“Overall, the budget is unlikely to help the economy significantly and does not give a strong indication of how it expects to meet its debt obligations going forward or how it will address depleting reserves.” hopes to do so,” said Trisha Perries, head of economic research at Frontier Research.
“There is no clear indication of a move to the imf, as they seek bilateral and multilateral support echoing the Central Bank of Sri Lanka roadmap,” he added.
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