President Ranil Wickremesinghe said yesterday (27) the restructuring of domestic debt will have no impact on the membership balance of any public funds, including the Employees’ Provident Fund (EPF).
The rate of return for superannuation funds will not be affected in any way either, he said at the opening of ‘Laksiyane Mandiraya’, the district administrative complex in Gampaha.
The President also said the restructuring of domestic debt will not pose any threat to the stability of the banking system, whether it is public or private banks.
He assured that the deposits of more than 50 million bank depositors will remain unaffected, and there will be no changes to the current interest rates paid on bank deposits.
He announced that proposals for restructuring both foreign and domestic debt will be presented to the cabinet today.
It was highlighted that Sri Lanka’s total public debt, comprising both domestic and foreign debt, amounted to USD 83,700 million by the end of 2022, representing 128.3% of the Gross Domestic Product (GDP). Of this amount, the foreign debt totalled USD 41,500 million, accounting for 63.6% of the GDP.
President Wickremesinghe also noted that the domestic debt at that time stood at USD 42,100 million, which constituted 64.6% of the GDP.
He highlighted the urgency of restructuring the country’s debt, stating that without such measures, the public debt would exceed 100% of the GDP by 2035.
He also emphasized that foreign creditors have already expressed their agreement to participate in the debt restructuring process.
To ensure debt sustainability in Sri Lanka, the President emphasized the need for restructuring both external and domestic debt.
Acknowledging the significant burden carried by foreign creditors, he mentioned that the country is set to receive USD 17 billion from them in the next five years, emphasizing the importance of local creditors also contributing to this effort.
