Sri Lanka SOE risk to country cut by fuel price formula, but still high: IMF
ECONOMYNEXT – Sri Lanka’s recent fuel price hike has partly reduced the negative impact of government finances from the state-owned enterprise sector, but risks are still high, the International Monetary Fund has said.
The IMF’s executive board in as assessment said the recent approval of a fuel pricing formula as a ‘major achievement’ but fiscal risks were "still elevated" and should be followed up with electricity pricing.
The board urged SriLankan Airlines to be put on a "solid commercial footing, and further strengthen SOEs governance and transparency."
Sri Lanka’s SOEs had debt of 10.8 percent of gross domestic product, on top of a 79.3 percent central government debt and 4.4 percent central government guaranteed debt.
The debt of Ceylon Petroleum Corporation was 2.9 percent and Sri Lankan Airlines 2.8 percent.
The government had also guaranteed 1.6 percent of GDP debt to the CPC and 0.2 percent of debt to Sri Lankan Airlines.
The Ceylon Electricity Board had debt of 2.3 percent of GDP, with 0.1 percent of GDP equivalent covered by Treasury guarantees. (Colombo/June21/2018)