Government Credit Limited Extended As Debt Grows
Posted 23,September

By Chaveendra Dunuwille

In Local News

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On Tuesday, Finance Minister Basil Rajapaksa sought approval from the Cabinet of Ministers to increase the government’s borrowing ceiling for the year. 

Heeding the request, the Cabinet this week approved the proposal and increased the credit limit by a further LKR 400 billion to a total of LKR 3.39 trillion for 2021. The extension of the credit limit was done per the Appropriation Act No.7 of 2020. 

The increase in the credit limit was necessary as expenditures in the health care sector and social security programs increased. At the same time, the government’s outstanding debt continued to rise. 

For the 1st half of 2021, the overall budget deficit increased by 6% year-on-year from LKR 735.7 billion to LKR 780.2 billion. The Total outstanding government debt increased from LKR 15.11 trillion to LKR 16.54 trillion.t