Sri Lanka will remain in default until 2026 | Finance

A stall selling dried onions and garlic at a market in Colombo, Sri Lanka. (Photo: AFP/VNA)

Sri Lanka’s President Ranil Wickremesinghe said on Monday that the island nation will remain in default for at least three more years as he tries to shore up the government’s fiscal capacity after the economic crisis has yet to come. ever had.

Mr Wickremesinghe took office last year – the height of national unrest due to months of shortages of food, fuel and medicine.

Mr Wickremesinghe then pushed for tax increases and negotiated with international creditors to pave the way for a much-needed bailout from the International Monetary Fund (IMF).

In a speech to parliament calling for economic reform, he said: “If we continue to pursue this plan, we can get out of this situation. bankrupt in 2026.”

Last month, President Wickremesinghe estimated the economy could shrink as much as 11% in 2022, as the country’s foreign exchange reserves Sri Lanka depleted and merchants were unable to import essential goods.

However, on February 8, Mr Wickremesinghe forecast the economy would grow again by the end of 2023 as new revenue-enhancing measures boost government revenue.

[Sri Lanka tuyên bố đáp ứng điều kiện để nhận hỗ trợ từ IMF]

The policy of raising taxes and eliminating subsidies for fuel and electricity did not receive the support of the people of Sri Lanka, which had been hit hard by the crisis and rampant inflation. Many unions have organized a strike.

Earlier, on February 4, Sri Lankan President Ranil Wickremesinghe announced that the country was meeting the prerequisites to receive a $2.9 billion financial support package from the IMF, in an effort to bring the economy to life. back on track after officially falling into disrepair default in May 2022.

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Sri Lanka is still going through the financial crisis worst since independence in 1948 with severe foreign currency shortages, galloping inflation and the economy falling into recession.

Due to an international default, the island nation of 22 million people is also suffering from high taxes on imports and exports, with shortages of food, medicine, fuel and other necessities, as well as power cuts every day.

Tra My (VNA/Vietnam+)

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