Sri Lanka expects IMF staff level deal by August, economy may shrink 7-pct: PM | Sinhala News

Sri lanka News – Sri Lanka is expecting a staff level agreement with the International Monetary Fund by August 2022, after a financial advisors work out a debt restructuring plan Prime Minister Ranil Wickremesinghe said.

“We have to give them a debt restructuring plan,” Wickremesinghe told parliament.

“Financial and legal advisors Lazard and Clifford Chance are preparing the report. We hope to give it to them by August. Then we can enter into a staff level agreement.”

Sri Lanka’s inflation will top 60 percent and gross domestic product may shrink to 76 billion US dollars from 94 billion in 2018, he said.

“This is based on official exchange rate,” Wickremesinghe said. “Based on unofficial rates is may be worse.”

Sri Lanka’s economy is expected to shrink 4 to 5 percent according to central bank and 6 to 7 percent according to IMF projection this year, he said.

Sri Lanka will take up to 2026 to come back to old level he said.

The steep depreciation has halved the real value of the Employees Provident Fund has halved and older people will suffer, he said.

Sri Lanka’s debt to GDP ratio has grown to 140 percent of GDP he said.

Sri Lanka’s GDP was 94 billion US dollars in 2018 and it will fall to 76.2 billion billion in 2022, Wickremesinghe said.

“That is a big fall over 4 to 5 years,” Wickremesinghe said. “This is on official exchagne rate. At unofficial rate it may be below60

“It will take till 2026 to go back to 2018 level. On this road map if go in a determined way 2023 end our GDP growth will be minus one.”

Our aim is to have a primary surplus (in the budget) by 2025. Our aim is to lift GDP growth to a stable level. Our aim is to have a stable economic foundation by 2026.” (Colombo/July05/2022)

Leave a Comment

Share to...