Sri Lankan economy has “completely collapsed”, says Prime Minister Ranil Wickremesinghe

Colombo: Sri Lanka’s prime minister says its debt-ridden economy has collapsed after months of food, fuel and electricity shortages, and the island nation of South Asia cannot even buy imported oil.

“We are now facing a much more serious situation than the simple shortages of fuel, gas, electricity and food. Our economy has completely collapsed. “This is the most serious issue we are facing today,” Prime Minister Ranil Vikremessing told parliament on Wednesday.

Sri Lanka's new Prime Minister Ranil Wickremesinghe has been appointed after the former leader resigned and left his home.

Sri Lanka’s new Prime Minister Ranil Wickremesinghe has been appointed after the former leader resigned and left his home. Credit:AP

Wickremesinghe is also the finance minister in charge of stabilizing the economy, which is being weighed down by heavy debts, lost tourism revenue and other effects of the pandemic and rising commodity spending.

“Right now, Ceylon Petroleum Corporation owes $ 700 million,” he told lawmakers. “As a result, no country or organization in the world is willing to give us fuel. “They are even reluctant to provide cash for fuel,” he said.

Wickremesinghe said the government had failed to act in time to change the situation as Sri Lanka’s foreign exchange reserves plummeted.

“If at least steps had been taken to slow down the economy in the beginning, we would not be facing this difficult situation today. But we missed this opportunity. “Now we see signs of a possible fall to the bottom,” he said.

A Sri Lankan woman sits outside a police station in protest, demanding cooking gas.

A Sri Lankan woman sits outside a police station in protest, demanding cooking gas.Credit:AP

Sri Lanka is confused through what is mainly backed by $ 4 billion ($ 5.8 billion) in credit limits from neighboring India. But Wickremesinghe said India would not be able to keep Sri Lanka alive 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 for a rescue package. It has to pay an average of $ 5 billion a year by 2026.

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