Sri Lanka Prime Minister: "Economy Completely Collapsed, Serious... IMF Support is the Only Option"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Sri Lankan Prime Minister Ranil Wickremesinghe, whose country is in a state of national default, admitted that the economy is "completely collapsed," stating that the situation is even more severe than the serious shortages of food, fuel, and electricity.

According to the Associated Press on the 23rd (local time), Prime Minister Wickremesinghe said in parliament the day before that Sri Lanka is facing a situation far more serious than just a shortage of supplies. Sri Lanka is experiencing its worst economic crisis due to a sharp increase in external debt combined with fiscal policy failures such as excessive tax cuts. Due to a shortage of foreign currency, imports of fuel, medicine, and food have virtually stopped, leading to ongoing shortages of daily necessities locally.

The Sri Lankan government declared a 'temporary default' on April 12, stating that it would suspend external debt repayments until negotiations for International Monetary Fund (IMF) bailout support were completed, and officially entered a default status on the 18th of last month.

Prime Minister Wickremesinghe said that with the shortage of foreign currency, the state-owned petroleum corporation is in debt of $700 million (approximately 910 billion KRW), making fuel procurement impossible. He explained, "Due to the petroleum corporation's debt, no country or institution is willing to supply us with fuel." Wickremesinghe also stated, "So far, we have received support securing a $4 billion credit line from India, but India cannot continue to support Sri Lanka indefinitely."

Sri Lanka resumed negotiations with the IMF delegation in Colombo starting on the 20th. Wickremesinghe said, "At present, IMF support is the only option for Sri Lanka."

This content was produced with the assistance of AI translation services.