Sri Lanka admits bankruptcy, warns of crisis through 2023

Author: AFP

Sri Lanka is bankrupt and the acute pain of its unprecedented economic crisis will drag on through the end of next year, Prime Minister Ranil Wickremesinghe told parliament Tuesday.

The island nation’s 22m people have endured months of galloping inflation and lengthy power cuts after the government ran out of foreign currency to import vital goods, with economists blaming mismanagement for the worsening economic woes.

Wickremesinghe said the once-prosperous country would go into deep recession this year and acute shortages of food, fuel and medicine would continue.

“We will have to face difficulties in 2023 as well,” the premier said. “This is the truth. This is the reality.”

He said Sri Lanka’s ongoing bailout talks with the International Monetary Fund depended on finalising a debt restructuring plan with creditors by August.

“We are now participating in the negotiations as a bankrupt country,” Wickremesinghe said.

“Due to the state of bankruptcy our country is in, we have to submit a plan on our debt sustainability to them separately. Only when (the IMF) are satisfied with that plan can we reach an agreement.”

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