Dilrook Kannangara

Sri Lanka is doomed under Ranil’s foolish gimmicks that are kept hidden from locals. However, an influential expert group has pointed out the real horror of Sri Lanka’s so-called debt restructure. All that Ranil has done is pile up more and more debt since late 2022 and postponed the repayment of loans and their interest until 2028. Not only the compound interest that would have accumulated for 6 years will sink Sri Lanka, but the fraudulent debt restructure deal will keep the island poor (or if it somehow improves its GDP, the debt relief will unravel and extremely high interest rates will apply to existing loans).

Source: Council on Foreign Relations

https://www.cfr.org/blog/sri-lankas-bond-deal-should-not-set-precedent

The article points out 3 scenarios. Of that the only economically positive scenario is this.

If GDP averages more than $100 billion between 2025 and 2027, the stock of new bonds increases to $10.65 billion, and the average coupon increases to 8 percent. In that case, there is essentially no long-term debt relief as the higher coupon offsets the lost face value.”

https://www.cfr.org/blog/sri-lankas-bond-deal-should-not-set-precedent

For the record the interest rate in 2022 was just 6.5%, way below 8%.

If Ranil is allowed to fool the gullible and ruin the future of Sri Lanka, the nation will land in a much worse situation than 2022.