Interest payments on domestic debt grew by 80.5 per cent to Rs188 billion in July 2014 from Rs104bn in the same month last year, said a State Bank report issued last week.
The Monetary Compendium for September 2014 reveals that massive borrowing by the government at a very high cost finally emerged as the biggest burden on the economy.
The debt servicing on floating debt and non-funded debt declined but the debt servicing on permanent debt jumped by 306.7pc in July.
The report showed that the government had to pay Rs147bn in July this year as debt servicing on permanent debts compared to just 36bn a year earlier, a rise of 306.7pc. The permanent debt rose to Rs3.999 trillion in June 2014 while it was Rs2.174tr in June 2013.
