{"id":359817,"date":"2025-12-21T14:06:08","date_gmt":"2025-12-21T14:06:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/359817\/"},"modified":"2025-12-21T14:06:08","modified_gmt":"2025-12-21T14:06:08","slug":"top-economists-call-for-halt-to-sri-lanka-debt-repayments-after-cyclone-ditwah-economics","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/359817\/","title":{"rendered":"Top economists call for halt to Sri Lanka debt repayments after Cyclone Ditwah | Economics"},"content":{"rendered":"

A group of the world\u2019s top economists \u2013 including the Nobel prize winner Joseph Stiglitz \u2013 have called for Sri Lanka\u2019s debt payments to be suspended as it tackles the devastation caused by Cyclone Ditwah<\/a>.<\/p>\n

More than 600 people were killed and hundreds of thousands of homes destroyed across the island, in what Sri Lanka\u2019s president, Anura Kumara Dissanayake<\/a>, called the \u201clargest and most challenging natural disaster in our history\u201d.<\/p>\n

The country\u2019s $9bn (\u00a36.8bn) national debt was restructured last year, after lengthy negotiations with creditors after the government defaulted on repayments in 2022. But development campaigners warned at the time that the burden on Sri Lankan taxpayers remained unsustainable.<\/p>\n

Before the cyclone hit, annual repayments were expected to total 25% of government revenues \u2013 a high level by international and historical standards.<\/p>\n

In a statement, the group of 120 global experts called for fresh debt restructuring to restore the country\u2019s repayments to a manageable level, given the scale of environmental destruction.<\/p>\n

Alongside Stiglitz, the signatories include Jayati Ghosh, a renowned Indian development economist at the University of Massachusetts Amherst in the US, the inequality expert Thomas Piketty, the former Argentinian economy minister Mart\u00edn Guzm\u00e1n, and Kate Raworth, the author of Doughnut Economics<\/a>, a widely read book about capitalism and the environment.<\/p>\n

\u201cSri Lanka is now confronting a severe economic shock triggered by the recent cyclone, extensive flooding and landslides, which has inflicted extensive damage to infrastructure, livelihoods, and key sectors of the economy,\u201d they said.<\/p>\n

\u201cThis environmental emergency is poised to absorb \u2013 and potentially exceed \u2013 the extremely limited fiscal space created by the current debt restructuring package. Additional external debt is already being taken on from the [International Monetary Fund (IMF)], and more lending to deal with the impacts of the disaster is likely.\u201d<\/p>\n

They called for the \u201cimmediate suspension of Sri Lanka\u2019s external sovereign debt payments, and a new restructuring that restores debt sustainability under the new circumstances\u201d.<\/p>\n

Research by the campaign group Debt Justice found that after the 2024 debt restructuring deal, which involved some investors accepting a \u201chaircut\u201d on expected repayments, private sector creditors were still on course to make 40% more profit lending to Sri Lanka than to the US government.<\/p>\n

Since the cyclone hit last month, the Sri Lankan government has asked for a $200m emergency loan from the (IMF<\/a> to help it through the immediate crisis, but disbursements under this \u201crapid financing instrument\u201d are usually expected to be repaid within three to five years.<\/p>\n

Scientists at World Weather Attribution, a coalition of climate experts, found that global heating was likely to have exacerbated the severity<\/a> of Sri Lanka\u2019s flooding, as well as that of other Asian countries, including Indonesia and Malaysia, that have also been badly affected in recent weeks.<\/p>\n","protected":false},"excerpt":{"rendered":"A group of the world\u2019s top economists \u2013 including the Nobel prize winner Joseph Stiglitz \u2013 have called…\n","protected":false},"author":2,"featured_media":359818,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46],"class_list":{"0":"post-359817","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-ca","10":"tag-canada","11":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/359817","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=359817"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/359817\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/359818"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=359817"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=359817"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=359817"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}