Sri Lanka Economic Crisis: President Calls for Bill Support

Colombo, Jun 2 (PTI) Sri Lanka's President Ranil Wickremesinghe on Sunday urged all political parties to support the economic transformation bill in Parliament as an urgent measure to help the crisis-hit island nation sustain its bankrupt economy.

"We have entered an agreement with the International Monetary Fund and we can't renege it now, we have to go forward with cooperation from our friendly countries," Wickremesinghe said while addressing a gathering here in the capital.

He dismissed suggestions from opposition parties that the IMF agreement can be revised, saying they must put forward an alternative plan on the economy.

"Criticism is easy but implementation is hard," said the 75-year-old leader, who also holds the portfolio of minister of finance.

"By the end of 2023, our debt was USD 83 billion over and above our GDP. We have entered an agreement with the IMF giving our plan to stabilise our economy,” Wickremesinghe said.

The island nation, in April 2022, declared its first-ever sovereign default since gaining independence from Britain in 1948. The unprecedented financial crisis led President Wickremesinghe's predecessor Gotabaya Rajapaksa to quit office in 2022.

Earlier in the month, Foreign Minister Ali Sabry had said Sri Lanka is looking at a reduction of approximately USD 17 billion from its overall debt burden in the ongoing debt restructuring process.

In March, the IMF said it has reached a staff-level agreement with Sri Lanka for the next phase that would enable it access to USD 337 million from the nearly USD 3 billion bailout approved in 2023 for the cash-strapped country.

Two tranches of USD 330 million each were released in March and December 2023 even as the Washington-based global lender has praised Colombo for its macroeconomic policy reforms, which it said, “are starting to bear fruit.”

Commenting on the ongoing debt restructuring talks, Wickremesinghe said Sri Lanka had asked for a debt moratorium from 2027 until 2042.

"In addition to this, as we are still an import-oriented economy, we have to obtain more loans to convert our economy to an export-oriented one,” he added.

The president said the economic transformation bill aims to tackle the problem of sustaining and stabilising the economy. He added that the bill proposes to reduce the debt burden from 128 per cent of the GDP in 2022 to 13 per cent of the GDP by 2032.

The opposition has criticised the bill as one to help Wickremesinghe gain re-election in the presidential polls to be held between mid-September and mid-October.

Wickremesinghe, however, is yet to announce his candidacy.