BY Paneetha Ameresekere

Rupee or domestic credit by the banking and monetary sectors to the Government of Sri Lanka (GoSL) and public corporations continued to overshadow credit to the private sector for the seventh consecutive month to February 2022, a phenomenon last seen nearly 33 years ago in 1989, Central Bank of Sri Lanka (CBSL) data of Friday’s (8 April) showed. 

For instance, credit to the GoSL and to public corporations amounted to Rs 7,331 billion in February 2022, while credit to the private sector amounted to a mere Rs 7,051 billion in that month, the former being more by Rs 280 billion over the latter. And in the previous month January 2022, credit to the GoSL and to public corporations amounted to Rs 7,236 billion, while credit to the private sector amounted to a mere Rs 7,017 billion that month, the former being more by Rs 219 billion over the latter.

Meanwhile, in December 2021, credit to the GoSL and to public corporations amounted to Rs 7,467.9 billion, while credit to the private sector amounted to a mere Rs 6,981.4 billion, the former being more by Rs 486.5 billion over the latter. In November 2021, credit to the GoSL and to public corporations amounted to Rs 7,259 billion and credit to the private sector Rs 6,920.1 billion, an increase of Rs 338.9 billion. 

Similarly, in the months of October, September and August 2021 these respective figures were Rs 7,116.8 billion and Rs 6,859.6 billion, Rs 6,915.2 billion and Rs 6,824.6 billion and Rs 6,819 billion and Rs 6,795.5 billion, increases of Rs 257.2 billion, Rs 90.6 billion and Rs 23.5 billion, respectively.   Previously, such a phenomenon occurred for 10 consecutive months, from January 1989 to October 1989, CBSL data showed. 

Three matters of political interest, coinciding with those developments took place during that earlier period. They were President Ranasinghe Premadasa being elected to power at the Presidential Poll of 19 December 1988 and taking over from President J.R. Jayewardene who went into retirement on 31 December 1988, the IPKF fighting the LTTE in the North and East of the country and the JVP fighting the GoSL in the rest of the country. 

However, coinciding with the killing of JVP leader Rohana Wijeweera by the Army on 13 November 1989, private sector credit once more overtook credit to both the GoSL and public corporations together beginning from that month, before its collapse nearly 32 years later  in August 2021 and continuing to play second fiddle to the GoSL and public corporations till February 2022, according to latest CBSL data.