Colombo: Sri Lanka’s prime minister says debt-ridden economy has collapsed after months of food, fuel and electricity shortages, and the South Asian island nation can’t even buy oil imported.
“We are now facing a much more serious situation beyond the mere shortage of fuel, gas, electricity and food. Our economy has collapsed completely. This is the most serious problem we have today,” he said on Wednesday. in Parliament Prime Minister Ranil Wickremesinghe.
Sri Lanka’s new prime minister, Ranil Wickremesinghe, was appointed after the previous leader resigned and fled his home. Credit: AP
Wickremesinghe is also the finance minister in charge of stabilizing the economy, which is collapsing under the weight of large debts, the loss of tourist income and other impacts of the pandemic and rising commodity costs.
“Ceylon Petroleum Corporation currently has a debt of $ 700 million,” he told lawmakers. “As a result, no country or organization in the world is willing to provide us with fuel. They are even reluctant to provide fuel for cash,” he said.
Wickremesinghe said the government had not acted in time to turn the situation around as Sri Lanka’s foreign reserves dwindled.
“If only measures had been taken to curb the collapse of the economy at the beginning, we would not be facing this difficult situation today. But we missed that opportunity. We are now seeing signs of a possible fall to the bottom, “he said.
A Sri Lankan woman sits in protest in front of a police station asking for gas to cook. Credit: AP
Sri Lanka has been wrapped up with support mainly of $ 4 billion ($ 5.8 billion) in credit lines from neighboring India. But Wickremesinghe said India could not keep Sri Lanka afloat for too long.
Sri Lanka has already announced that it is suspending the repayment of $ 7 billion in foreign debt due this year, pending the outcome of negotiations with the International Monetary Fund on a bailout package. It has to pay an average of $ 5 billion annually by 2026.