Sri Lanka SOE liabilities pose risks: Moody’s

ECONOMYNEXT – A number of “financially strained” SOEs (state-owned entities) with sizeable liabilities pose additional risks to the Sri Lankan government’s balance sheet, should financial support be needed, Moody’s rating agency said in a new report.

The IMF estimates that non financial SOE debt is worth nearly 12% of GDP.

Moody’s Investors Service said that SOE reforms including the Statement of Corporate Intents and impending energy pricing reforms underpin the efforts to reduce fiscals risks to the government.

“At this stage, the effective implications of the reforms for SOEs’ financial strength is unclear. Crystallization of some contingent liabilities could add significant fiscal costs.”
(COLOMBO, December 19, 2017)

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