Sri Lanka’s economic crisis is worsening, with the government heavily reliant on borrowing to cover budget shortfalls. Professor Wasantha Athukorala from Peradeniya University highlighted that the country has consistently borrowed over 800 billion rupees monthly through treasury bills and bonds between January and August, with some months seeing this figure swell to 1,200 billion rupees. The nation’s debt burden has thus grown significantly, escalating financial pressures.
In the last 10 days alone, the government borrowed nearly 240 billion rupees from local sources, a desperate measure driven by the need to service existing debts. This debt cycle underscores the gravity of the situation, as tax revenues fall short of covering essential expenditures. For 2024, projections indicate that revenue collection goals may not be met, further complicating efforts to stabilize the economy and reduce the debt burden.
Economic analysts are calling for structural reforms to address fiscal imbalances, as excessive borrowing to repay previous loans is unsustainable and could hinder economic growth prospects.
