Sri Lanka is headed for a debt crisis, the finance ministry warned Sunday, blaming a series of costly projects commissioned by the previous government for record-high repayments.
Finance Minister Mangala Samaraweera said payments of capital and interest would reach $2.84 billion this year, mostly to repay loans for extravagant projects under former president Mahinda Rajapakse.
"The crisis will further worsen next year,"Samaraweera said in a statement, adding repayments are expected to soar to $4.28 in 2019."Repayments will go to pay the debts that were obtained during the Rajapakse regime for the waste, fraud and corruption committed by the oligarchies of the Rajapakses,"he added.
Foreign reserves totalled $9.9 billion at the end of April, the central bank says.
Samaraweera said Rajapakse's administration secured two high-interest loans worth $1.5 billion in the final year of its decade-long rule.
Officials say Rajapakse relied heavily on China to finance his grand infrastructure projects but many ended up becoming a burden on Sri Lanka's $87 billion economy.
The government which ousted Rajapakse in 2015 was forced to lease to China a loss-making port commissioned by and named after the strongman leader in his home constituency of Hambantota in the south.
An international airport built in Rajapakse's name met the same fate, with revenue insufficient to meet the salary bill.
Only one airline operates out of Rajapakse International and attempts to privatise the airport have not progressed.