By Sandun Jayasekera:




The total government debt increased to Rs.6793 billion in 2013 from Rs.6000 billion in 2012, according to the 2013 annual report of the Finance and Planning Ministry released yesterday.

Domestic debt of Rs.3,833 billion accounted for 56.4 percent of total debt, while foreign debt of Rs.2,960.4 billion formed the balance 43.6 percent of the total debt.

“The debt to GDP declined to 78.3 percent from 79.2 percent in 2012 mainly due the increase in the nominal value of GDP. In rupee terms, there was a decline in the liability of the foreign debt by Rs.25.5 billion due to the variation in exchange rates,” the report noted.

The domestic debt to GDP ratio increased to 44.2 percent from 42.7 percent in 2012, reflecting a higher growth in domestic borrowings. The foreign debt to GDP ratio declined 34.1 percent from 36.5 percent in 2012.

Of the total domestic debt, the share of medium to long-term debt increased to 76.3 percent in 2013 from 74.8 percent in the previous year.

 According to the report, Treasury bonds dominated the medium to long-term debt category by accounting for 83.8 percent of it.

The share of rupee loans declined to 1.9 percent of the medium and long-term debt from 2.4 percent in the previous year.

The short-term domestic debt of Rs.909.2 billion by the government in 2013 was dominated by Treasury bills representing 77 percent of it.

Meanwhile, out of the total foreign debt of Rs.2960.4 million, Rs.1492.8 million was concessional loans. In 2012, the number stood at Rs.1369.6 million.
The non-concessional loans in 2013 stood at Rs.1467.6 million, up from Rs.1397.8 million in 2013. A steady increase could be seen in non-concessional loans from 2011.

According to the Finance Ministry, the rise in non-concessional loans was mainly due the accommodation of foreign investments in the government securities and the issuance of internal bonds, along with the rise in the per capita income.

In 2013, the per capita income of the country increased to US $ 3,280 from US $ 2,923 in the previous year.

Meanwhile, total debt service payments in 2013 amounted to Rs.1,162.9 billion, of which, Rs.700 billion or 60 percent was for repayments, while the balance 40 percent of Rs.462 billion was interest.

The total debt service payments as a percentage of GDP for 2013 remained unchanged from 2012 at 13.4 percent.

The debt service payments as a percentage of the government revenue increased to 102.2 percent from 96.1 percent amid lower growth in the government revenue in comparison to the higher growth in debt service payments.

The interest payments to revenue ratio also increased to 40.7 percent from 38.9 percent in 2012.