Budget Burdens: Prof. Athukorala shows high ‘interest’

21 November 2024 10:50 am Views - 613

Professor in Economics at the University of Peradeniya Wasantha Athukorala highlighted Sri Lanka’s increasing domestic debt and rising interest payments—which have come in to focus in the current political discourse. He claimed that LKR 2,651 billion was allocated for interest payments in the 2024 budget and that this amount far exceeded spending on other expenditure categories.
To verify these claims, FactCheck.lk consulted the Ministry of Finance (MoF) Approved Detailed Budget Estimates for 2024 (BE24).
BE24 shows that the government did allocate LKR 2,651 billion for interest payments in the 2024 budget, as cited by the professor. 
Exhibit 1 shows that the allocation for interest payments (40% of total expenditure) is much higher than the 14% of expenditure allocated for the combined sum of spending on health, education, and social protection by the Central government, and potentially up to another 4% by the provincial governments. 
Even the highest sectoral allocation, which is for defence—counted as allocations to both the Ministry of Defence and the Ministry of Public Security—accounts for only 9% of total expenditure, less than a quarter of what is allocated for interest payments.
All these numbers support the professor’s claim: that interest payments are a much larger share of government spending than other expenditure categories.
Therefore, we classify the statement as TRUE.
Additional note: The social sector expenditure calculations are based on the 2024 Budget allocations: for Health, the Ministry of Health; for education, the Ministry of Education; for social protection, the Ministry of Women, Child Affairs, and Social Empowerment and the allocation for the Aswesuma programme under the Ministry of Finance.
*FactCheck.lk’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck.lk will revisit the assessment.