According to Ministry of Finance Sri Lanka’s total debt stock has increased by 233% to Rs.7,391 billion during the period from 2005 to 2014.

According to Finance Minister Ravi Karunanayake, Sri Lanka is embroiled in a gigantic debt trap.

The main reason is that the loans obtained by the previous regime for infrastructure development has not brought any returns on its investments.

Before launching mega projects of ports, airports and expressways, there were unsolicited proposals to build the Hambantota Port, the Mattala Airport and southern expressways which could be easily carried out Minister added.

Further the national revenue and the export earnings constantly came down since 2011 up to year 2014.

Issuing a statement Ministry said the total debt burden of Sri Lanka in 2005 was Rs.2,222 billion and, within 5 years, it increased to Rs.4,590 billion in 2010.

The statement further said the debt servicing to be paid by Sri Lanka to foreign financiers is also increasing constantly.

The debt servicing of US$ 1,828 million paid in 2016 will be increased by more than double to US$3,992 million being the highest debt repayment to be paid by Sri Lanka in a year due to colossal borrowings by the previous government.

Although the country or its people receive no dividends from these Port and Air Port projects built on foreign loans by the previous regime, the current government has been compelled to repay installments and interest for such loans with effect from 2015 though they do run at a loss.

This debt repayment covers only the project loans and the International sovereign bond. The liability on the loan obtained from the IMF and the investment by foreigners on the treasury bills and treasury bonds is to be paid separately.