Vijitha Herath

MP Herath misrepresents total interest payments

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According to the 2018 Central Bank Annual Report, when the total income was Rs. 1,920 billion...

Divaina | May 28, 2019

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False

Fact Check

On 28 May 2019, Divaina reported that MP Vijitha Herath made the following claim: 

In 2018, while total government revenue was Rs. 1,920 billion, interest payment on debt was Rs. 2,088 billion and exceeded the revenue by Rs. 168 billion. 

The 2018 Annual Report of the Central Bank of Sri Lanka (CBSL) reports the following as provisional estimates: total government revenue in 2018 as Rs. 1,919.973 billion (~Rs. 1,920 billion) and total interest payments as Rs. 852.19 billion. 

In making his point about interest payments MP Herath correctly cited the total revenue for 2018. But the Rs. 2,088 billion figure he reported as total interest payments was far from the correct figure of Rs. 852 billion. This also means that, contrary to what was claimed by the MP, interest payments were well below total revenue, rather than exceeding it. 

Therefore, we classify the MP’s claim as FALSE. 

*FactCheck’s verdict is based on the most recent information that is publicly accessible. As with every fact check, if new information becomes available, FactCheck will revisit the assessment. 

FactCheck is a platform run by Verité Research.
For a more detailed look at this fact check, visit our website at www.factcheck.lk.   

Additional Information:

The Rs. 2,088 billion figure claimed by the MP can be arrived at by adding the debt amortization payments of Rs. 1,236 billion in 2018 to the total interest payments. However, amortization payments are capital re-payments of debt; they are not the interest cost of the debt. The International Monetary Fund (IMF) 2014 Government Finance Statistics Manual in Section 4.24 makes it clear that interest payment is distinct from capital repayment on debt. For example, interest payments are counted as government expenditure, while capital repayment on debt is not. The MP referred to interest payments, not interest plus capital repayments. By doing so he has misrepresented the facts.

 

 



Sources

Central Bank of Sri Lanka Annual Report 2018, Chapter 6, Tables 6.2, 6.3, available at:https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/publications/annual_report/2018/en/10_Chapter_06.pdf

International Monetary Fund, Government Finance Statistics Manual 2014, p. 71, available at:https://www.imf.org/external/Pubs/FT/GFS/Manual/2014/gfsfinal.pdf

 

 

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