Mid 2024 will be a turning point for Sri Lanka’s economy, says Ranil

Mid this year will be the turning point for Sri Lanka’s economy, according to President Ranil Wickremesinghe, as from then on the island nation will have opportunities for further progress.

“Looking ahead, we have opportunities for further progress after June,” Wickremesinghe said this week.
He added the rupee, which has been strengthening, is expected to reach Rs.280 against US$ by June, leading to a decrease in the prices of goods.

While noting that ongoing hardships will continue for another three years, Sri Lanka reaching the final stage of the government’s programme aimed at steering the country away from bankruptcy, is a key achievement, he said.

“Our objective is to proceed with negotiations involving the countries that have provided loans to us. This process is being overseen by France, Japan, and India, who are chairing the discussions involving all the countries that have officially lent money to us,” said Wickremesinghe addressing the inauguration ceremony of Bodhigara and Golden Fence.

The local staff and the International Monetary Fund (IMF) are anticipated to reach a staff-level agreement this weekend after concluding discussions on the second review under the Extended Fund Facility (EFF). Discussions with China are on-going, and discussions with private creditors are underway. The Treasury Secretary and Central Bank Governor are scheduled to return to Europe to engage in discussions with these groups.

“Following the declaration of our bankruptcy-free status, a joint meeting of the World Bank and the IMF is planned for April. Subsequently, the relevant agreement is expected to be signed shortly thereafter,” said Wickremesinghe.

“I aim to complete all these tasks by June and July, especially considering the upcoming presidential and parliamentary elections. It’s crucial to finish these activities before the elections. Once completed, we will demonstrate to the world that we are capable of repaying our debts, which will lead to the return of aid money that we haven’t received yet and an increase in the country’s dollar reserves,” he said.

As many banks and companies are hesitant to engage in business with Sri Lanka at present, Wickremesinghe expressed confidence in these groups resuming activities once the listed activities are concluded. Consequently, available funds are expected to increase.

“Considering these factors, the relief provided to the people as a bankrupt country is three times greater than what was provided during a stable economy. These efforts ultimately benefit the country’s economy,” he said.

Wickremesinghe went on to caution that stabilising the economy alone will not solve all problems since Sri Lanka is currently reliant on imports. The gap is often bridged through foreign loans, which sets us up for another economic crisis in about a decade.

“To prevent such a scenario, I plan to hold discussions with the World Bank, the Asian Development Bank, and the International Monetary Fund to initiate a programme aimed at swiftly transitioning the country towards an export-oriented economy,” he said.