Question:
In the context of the IMF Extended Fund Facility (EFF) for Sri Lanka, ‘Debt Sustainability Analysis’ (DSA) aims to assess:
(1) the total value of foreign assets held by the Central Bank.
(2) the ability of the country to meet its current and future debt service obligations without default.
(3) the profitability of commercial banks.
(4) the level of inflation in the economy.
(5) the trade balance surplus.
Correct Answer:
(2)
Answer Explanation:
DSA is the IMF’s core tool to determine if a country’s debt burden is manageable. It projects whether the government can pay back its loans without needing endless bailouts or defaulting.
Topic: Sri Lankan Economy Year: 2024
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