© Reuters. FILE PHOTO: Drivers push auto-rickshaws in a queue to buy petrol at a petrol station amid Sri Lanka’s economic crisis, in Colombo, Sri Lanka, July 29, 2022. REUTERS/Kim Kyung-Hoon
By Udith Jayasinghe
COLOMBO (Reuters) – Sri Lanka has met the prerequisites to unlock $2.9 billion in aid from the International Monetary Fund (IMF) and expects swift approval from the global lender, President Ranil Wickremesinghe said on Saturday.
“We are successfully completing the difficult phase required to obtain the support of the International Monetary Fund. We expect to get their consent without delay,” Wickremesinghe said in his address to the nation to mark the 75th Independence Day.
Sri Lanka, caught in its worst financial crisis since independence from Britain in 1948 caused by a severe shortage of dollars, experienced high inflation, a devaluation of its currency and its economy slipped into recession.
The island of 22 million people is also affected by high taxes, shortages of essentials such as medicine and fuel and daily power outages.
Wickremesinghe, who took office after his predecessor fled the country and resigned last year after thousands of protesters occupied his office and residence, has vowed to get the economy back on track but warned it would be an uphill task.
“I know that many of the decisions I have been forced to make since I took office as president have been unpopular… I will continue this new reform program with the majority of people who love this country,” he added.
Sri Lanka is currently focused on obtaining financial guarantees from key bilateral creditors China and Japan. India, the third largest creditor, agreed last month to support debt restructuring.
The Central Bank of Sri Lanka estimates an economic turnaround in the second half of 2023 and that inflation will reach single digits by the end of this year.