Sri Lanka bank credit to government surges in Jan 2018
ECONOMYNEXT – Sri Lanka’s bank credit to government surged in January 2018, though much less than in earlier years, while credit to private businesses were steady and state enterprises borrowings were negative, official data showed.
Credit to private borrowers were 41.56 billion rupees, down from 59.88 billion rupees in December with the total rising to 14.68 percent from a year earlier to 4,863.4 billion rupees, central bank data showed.
Bank credit to the central government to surged to 52.9 billion rupees in January 2018, from 2.7 billion rupees in December 2018.
The government usually borrows less in December to show a lower budget deficit number and borrows heavily in January including by printing money from the central bank through so-called interest free ‘provisional advances.’
In January 2018 central bank credit was 7.5 billion rupees.
In January 2018 the government borrowed 141 billion rupees after only borrowing 11 billion in December and in January 2016 the government borrowed 108.5 billion rupees, showing that in 2018 the borrowings were much less indicating that the 2017 budget deficit numbers were more accurate.
Credit to state enterprises contracted 7.5 billion rupees to 56.86 billion rupees, down 2.7 percent from a year earlier.