Lanka's public debt at 83% of GDP needs to be better managed: World Bank VP SA Schafer

World Bank Vice President, South Asia Region, Hartwig Schafer who arrived on a three day visit to gain a better understanding of the country’s development priorities, today launched the 4th edition of the World Bank’s Sri Lanka Development Update (SLDU) which "finds the island in a challenging macroeconomic landscape."

According to the recent updates Sri Lanka’s debt portfolio carries significant risks . Mr Schafer taking to his Twitter handle commented that " public debt which remains high at 83 percent of GDP needs to be better managed. Adding that Sri Lanka is rapidly aging and needs to plan to care for its elderly and the services they’ll require."

2/2 on the downside: public debt remains high at 83% of GDP and needs to be better managed. Also, Sri Lanka is rapidly aging and needs to plan to care for its elderly and the services they’ll require. #SLDU2019 pic.twitter.com/qUmHZeKWwh

— Hartwig Schafer (@HartwigSchafer) February 14, 2019

The World Bank  report further revealed  that as the country approached upper middle-income status, it has been borrowing on more commercial terms with increased cost and risk.

"The majority of foreign currency denominated debt is now largely made up of market borrowings including International Sovereign Bonds (ISBs) and Sri Lanka Development Bonds (SLDBs), which in 2017 accounted for 53 percent, up from just 3 percent of total foreign currency denominated debt in 2000 " - the report revealed.

Earlier today (Feb 14) Mr Schafer met with the Governor of the Central Bank Dr. Indrajit Coomaraswamy.

Discussions included topics such as stabilizing a financial system, risk management and building resilience in the country. While lesterday's discussion with the  Finance Minister touched on issues such as increasing FDI, improving the competitiveness of the country and increasing private sector participation..

Mr Schafer is also set to hold discussions on Sri Lanka’s low female labour force participation, visit project sites to meet communities engaged in development work and launch the World Bank’s new Sri Lanka Development Update. He will also meet with leading representatives of the private sector and the civil society.