Sri Lanka is “bankrupt,” Prime Minister Ranil Wickremesinghe said Tuesday (05), as the country suffers its worst financial crisis in decades, leaving millions struggling to buy food, medicine and fuel.
Wickremesinghe told lawmakers that negotiations with the International Monetary Fund (IMF) to revive the country’s “collapsed” economy are “difficult,” because the South Asian nation of 22 million has entered the talks as a bankrupt country, rather than a developing one.
“We are now participating in the negotiations as a bankrupt country. Therefore, we have to face a more difficult and complicated situation than previous negotiations,” he said in Parliament.
“Due to the state of bankruptcy our country is in, we have to submit a plan on our debt sustainability to (the IMF) separately,” Wickremesinghe added. “Only when they are satisfied with that plan can we reach an agreement at the staff level. This is not a straightforward process.”
He said he hoped that a report on debt restructuring and sustainability would be submitted to the IMF by August. Once there is an agreement, a comprehensive loan assistance program would be prepared for a period of four years, Wickremesinghe said.
He said that by the end of this year, inflation will rise to 60%.
“This will be a difficult and bitter journey,” Wickremesinghe said. “But we can get relief at the end of this journey. Progress can be made.”