Sri Lanka inflation could top 40%, PM warns
NEW DELHI: Crisis-hit Sri Lanka‘s annual inflation could breach the 40 per cent mark, Prime Minister Ranil Wickremesinghe has warned.
This comes amid a severe crunch of foreign reserves that has seen the island nation struggling to pay for import of fuel and other essential supplies, as the country battles its worst economic crisis in modern history.
An embattled political leadership is facing the wrath of protesters, with previous prime minister Mahinda Rajapakse and his cabinet forced to resign under pressure.
The new government under Wickremesinghe has assumed office, but the PM is yet to name a finance minister. This has led to an unprecedented situation about who is to lead the country’s talks with global agencies like IMF for financial assistance.
Wickremesinghe said a new finance minister is likely to be appointed by Wednesday.
Wickremesinghe said the government will cut infrastructure spending while planning a two-year relief programme to stabilise the economy. An interim budget will be presented within six weeks, he added.
“With the interim budget, it is just about cutting down expenditure, cutting to the bone where possible and transferring it to welfare,” Wickremesinghe, who took office two weeks ago, said in an interview.
He also said Sri Lanka will seek fertilisers and medicines from China, one of its biggest creditors.
India has sent assistance worth billions of dollars to Sri Lanka in the form of of humanitarian aid, cooking gas, large quantities of fuel, and medicinal supplies.
This includes a $33 billion credit line assistance, 40,000 metric tons of diesel, shipments of rice, milk powder, and medicinal drugs. Further, 40,000 metric tons of petrol and 400,000 metric tons of cooking gas also arrived from India.
(With agency inputs)