Sri Lanka debt strategy is being defended by Anil Jayantha, who says sustainable loans help the economy despite dollar pressure.
Sri Lanka debt management can support the economy if loans are obtained sustainably and handled properly, Deputy Minister of Finance Anil Jayantha told Parliament.
He said borrowing while governing is not wrong if it is done in a sustainable manner, adding that the economy functions correctly when debt is managed responsibly.
The Deputy Minister said taking loans has been socialized as a mistake only because previous governments misused borrowed funds.
He pointed out that there is a wrong belief in society that the economy collapses whenever debt increases.
According to him, Sri Lanka faced a debt crisis because previous governments failed to obtain proper results from the loans they secured.
However, he emphasized that if debt is managed systematically with the approval of Parliament, it can be beneficial to the economy.
The Deputy Minister said the government has already achieved debt sustainability.
He further stated that the plan to reach the 2032 target is now scheduled to be completed by 2026.
Jayantha also revealed details about foreign financial facilities Sri Lanka expects to receive in the coming months.
He said the International Monetary Fund is expected to provide US$ 700 million by June 27.
The Asian Development Bank is scheduled to provide US$ 480 million this year.
The World Bank is expected to provide US$ 150 million, while another US$ 50 million is expected from an affiliated institution.
Referring to the 2022 economic collapse, the Deputy Minister said the crisis was not caused only by the failure to control the value of the dollar.
He said wrong policy decisions taken by the government at that time and poor financial management also contributed to the collapse.
He added that the crisis was worsened by decisions such as restricting imports and defaulting on loan repayments.
Deputy Minister Anil Jayantha further stated that although the rising foreign exchange rate is currently placing pressure on the prices of imported goods, the government is working successfully within the inflation control framework.
He said necessary measures have already been taken to establish economic stability.
