Sri Lanka to receive USD 1.69 billion in loans within next 3-5 years: Report

The government has spent only 53% of the welfare budget allocated for the year within the first 8 months up to August, according to a report.

A latest report from the Ministry of Finance indicates that the welfare budget has primarily been used to fund the ‘Aswesuma’ welfare program.

Meanwhile, the report also states that Sri Lanka is expected to receive 1.69 billion US dollars in loans from multilateral agencies within the next 3 to 5 years.

In the Pre-election budgetary report by the Finance ministry, it is reported that, as of the end of August 2024, foreign development partners and lending agencies have entered into 10 agreements with the government for foreign financing totalling 398.7 million US dollars.

Of this amount, 350 million dollars has been secured in the form of loans.

Another 48.7 million dollars has been obtained through seven grant agreements with the governments of Japan and Australia under official development assistance.

Meanwhile, total foreign financing disbursements up to August 2024 amount to 1.01 billion dollars, of which 994.4 million dollars has been disbursed as loans while 11.3 million has been provided as grants.

The Asian Development Bank has disbursed 358.3 million dollars to Sri Lanka up to August 2024, slightly surpassing the International Monetary Fund, which has provided 334 million dollars in budget support loans. The World Bank has contributed 239.8 million dollars.

The ADB and World Bank have linked their budget support loans to Sri Lanka’s IMF program from last year.

A significant portion of the disbursements has been utilized in the budget support sector, accounting for 33% of the total disbursements.

The power and energy sector has utilized 13%, while the SME development sector has received 10%, and the finance sector has utilized 7%.

Additionally, the report stated that there is another 1.69 billion dollars in loans from multilateral agencies that has not yet been disbursed, and these funds are expected to be available in the next 3 to 5 years.

The report also showed that only 53% of Sri Lanka’s welfare budget has been utilized in the first eight months of 2024.

According to the report data 562.4 billion rupees out of the welfare budgeted 1,055.7 billion has been spent during this period.

The previous government increased the welfare budget by 15.3% this year compared to the actual expenditure of 915.4 billion rupees in 2023, as per the data, following the IMF recommendations.

Of the total 562.4 billion rupees spent in the first eight months, 112.7 billion went to the “Aswesuma” poverty alleviation program, 9.5 billion for school nutrition, 4.4 billion for school textbooks and uniforms, and 24.2 billion for fertilizer subsidies.