Sri Lanka’s external debt sustainability: Complacency based on incomplete analysis may be the worst enemy

Sunday 25th May 2014

Central Bank’s communication with the public is a good sign
The Central Bank’s Public Debt Department in a recent press release had informed the public that Sri Lanka had continued to improve its external debt sustainability indicators (available at: www.cbsl.gov.lk ).
These indicators, according to the Central Bank, had been computed “in accordance with the Manual of (sic) Effective Debt Management of the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP)”. Apparently, the objective of the Central Bank would have been to allay the fears of the people that the country is heading toward an external debt crisis – a view which they had heard from many critics. It is, therefore, not unusual for some printed media to consider the communication important enough to be reported on their front pages with bold headlines.

Sri Lanka’s External Debt Sustainability Complacency Based on Incomplete Analysis May Be the Worst Enemy by nelvely