Business and economics news
List of government institutions indebted to banks
It has been revealed that the Ceylon Petroleum Corporation (CPC) is the government institution that owes the highest amount to banks and that it has reached the Rs. 389 billion mark by April 2014.

By end last year the CPC owed the banks Rs. 419 billion, indicate the Mid-Year Fiscal Position Report 2014 released by the Finance Ministry.

The next in line that owes the banks is the Ceylon Electricity Board (CEB). This report states that the CEB owes Rs. 44.3 billion to banks by April 2014.

By last April, SriLankan Airlines owed banks Rs. 30.1 billion, the Sri Lanka Ports Authority Rs. 5.8 billion and the State Pharmaceutical Corporation owed Rs. 04 billion.

By this time the Ceylon Fertilizer Corporation had to repay Rs. 17.7 billion to the banks.


Whither Sri Lanka’s tourism in face of Aluthgama incidents?

With Australia issuing a travel advisory to tourists to be vigilant when travelling to Sri Lanka following the sectarian clashes in Aluthgama and Beruwala, Sri Lanka Association of Inbound Tour Operators (SLAITO) chairman Mahendra Kariyawasam said that these incidents have not affected tourism in the areas as yet.

He added that May-June is a lean period for tourist arrivals in the Aluthgama and Beruwala areas and instead they mostly travel to the eastern regions.

“So during this period the hotels in this area are not fully occupied,” Kariyawasam said.


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Central Bank clarifies recent media reports on External Debt Statistics in Annual Report

The recent press release by the Public Debt Department (PDD) highlighted the improvements in government’s external debt position. These improvements are well documented in the Central Bank Annual Report 2013 under Section 6.4 (pp. 176-180) and in Appendix Tables 105 to 113 and in Special Statistical Appendix Table 7, where the external debt of the government expressed as a per cent of GDP shows a decline to 34.1 per cent in 2013 from 36.5 per cent in 2012.

However, a few commentaries that have appeared in recent press articles and reports have attempted to point out a higher level of government external debt, on the basis of the outstanding external debt position of the country as presented in the Annual Report 2013. In this regard, it must be mentioned that the outstanding external debt position as reported in the Annual Report of the Central Bank is the total of the outstanding position of the SDRs, intercompany lending and Direct Investment Enterprises (DIEs), in addition to the external debt of the Government. Such classification is based on the International Monetary Fund (IMF) Balance of Payments Manual 6 (BPM6) presentation format, and is also followed by many advanced economies. The external financing contracted by deposit taking financial institutions, private sector and SOEs and direct investment enterprises in any country depends purely on their balance sheet strength, while the Government debt position reflects the direct indebtness of the Government. The Central Bank Annual Report 2013 clearly highlights this position under Section 5.12 (pp. 154) where government external debt is shown as only 56 per cent of the total external debt, while the balance is shown as being owned by deposit taking financial institutions, private sector and SOEs, Central Bank and direct investment enterprises.

The Manual of Effective Debt Management of the United Nations Economic and Social Commission for Asia and the Pacific (UN-ESCAP) under the section “Definition and Types of Public Debt” reviews the definitions of external public debt by multilateral agencies. It also proposes coverage of data that can be included to further improve compilation of external debt position of a country. Coverage of data presented in the PDD press announcement is of the government’s external debt position. Such compilation was first introduced in 2008 under the supervision and guidance of the then Deputy Governor of the Central Bank of Sri Lanka (CBSL) Mr. W A Wijewardena.
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