Sri Lanka President: "It May Take Several Months to Feel Economic Recovery"

Ranil Wickremesinghe Sri Lanka President
[Photo by AP News]

[Asia Economy Reporter Jeong Hyunjin] As Sri Lanka faces its worst economic crisis, declaring default and experiencing political turmoil, newly appointed President Ranil Wickremesinghe predicted that it will take at least several months before the Sri Lankan people can feel an improvement in the economic situation.

President Wickremesinghe said in an interview with The Wall Street Journal (WSJ) on the 31st of last month (local time), "I believe our country's economy has already hit rock bottom," forecasting accordingly. He described the current situation by saying, "I can see the light at the end of the tunnel, but the key is how quickly we get there."

Regarding ongoing negotiations with the International Monetary Fund (IMF), President Wickremesinghe anticipated that a working-level agreement would be reached by the end of August, stating, "We have reached the core of the negotiations. If the political situation had been stable, we would have done so already in July." WSJ explained that even if a preliminary agreement is made, actual disbursement of funds requires approval from the IMF board, which could take several months.

President Wickremesinghe said that once an agreement with the IMF is finalized, he will coordinate the differing views of creditors who have shown various approaches regarding Sri Lanka's sovereign default to derive a unified debt relief plan. He said, "On one side, there are India and Japan, supported by the United States, and on the other side, there is China. The key is to get them to agree on a single plan," adding that issues such as how to set the discount rate and whether to provide additional funds to clear existing debts also need to be coordinated.

Regarding reports that former Sri Lankan President Gotabaya Rajapaksa, who fled overseas after being chased by anti-government protesters, is expected to return, President Wickremesinghe responded, "I don't think it is the right time for him to come back." He warned that if former President Rajapaksa returns, political tensions could worsen again, saying, "There are no signs that he will return anytime soon."

Earlier, former President Rajapaksa fled overseas by military aircraft last month when anti-government protesters stormed the presidential office and residence, submitting his resignation via email. Subsequently, on the 20th of last month, the Sri Lankan parliament elected then-Prime Minister Wickremesinghe as the new president, acting as president in the interim.

Sri Lanka officially defaulted on May 18. It is obligated to repay $21 billion (approximately 27.4 trillion KRW) by the end of 2025, but it is known to be difficult to repay both principal and interest.

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