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Sri Lankan PM lays bare ‘terrifying’ facts of economy: petrol stocks for a day, powercuts to last 15 hours; says will not hide truth

“Although these facts are unpleasant and terrifying, this is the true situation,” he said, mincing no words while describing the state of the economy, which has all but collapsed

May 17, 2022
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Petrol, just enough for one day; usable reserves, hardly $1 million; and expected daily powercut up to 15 hours— these are some of many “unpleasant” and “terrifying” facts of Sri Lanka’s almost collapsed economy, laid bare by Prime Minister Ranil Wickremesinghe in an address to the nation Monday evening.

“The next couple of months will be the most difficult ones of our lives. I have no desire to hide the truth and lie to the public,” Wickremesinghe, who was appointed as prime minister by the country’s embattled President Gotabaya Rajapaksa last week said in his first televised address to the nation now gripped in an unprecedented economic crisis.

“Although these facts are unpleasant and terrifying, this is the true situation,” he said, mincing no words while describing the state of the economy, which has all but collapsed. 

“At the moment, we only have petrol stocks for a single day,” he said, “To ease the queues, we must obtain approximately $75 million within the next couple of days.”

In his speech, he said that a realistic projection of the country’s revenue for the year stood at LKR 1.6 trillion, while the total government expenditure is an estimated LKR 4 trillion, which means a budget deficit of SLR 2.4 trillion for a year, or 13 percent of the GDP.

“In November 2019, our foreign exchange reserves were at $7.5 billion. However, today, it is a challenge for the treasury to find $1 million. The Ministry of Finance is finding it difficult to raise the $5 million required to import gas,” Ranil said, without hiding the scale of the crisis. 

Under the Indian credit line, the Sri Lankan prime minister said, two more diesel shipments are due to arrive on May 18 and June 1, apart from the two petrol shipments expected on May 18 and 29. India has so far sent 12 shipments and over 4,00,000 MT of fuel under the Line of Credit. 

India is one of the countries providing much-needed support—totaling so far over $3.5 billion— to the island country, which now seems to be on the brink of a humanitarian crisis. 

While outlining the challenges, Wickremesinghe, who has been prime minister five times earlier, also informed about the efforts that his government was taking to meet the requirement, including proposing a “new alternative budget”, privatization of the country’s loss-making national carrier Sri Lankan Airlines.

He also admitted that despite his reluctance to print money, which will further increase inflation, he had to allow the printing of money as the government had left with no money to make up for the salaries of the public sector employees.

(SAM) 

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