The International Monetary Fund staff report that Sri Lanka faces \u201csolvency\u201d problems due to risks rising from implausible debt levels that threatens to crash its\u00a0 $81 billion economy due to Putin’s war.<\/p>\n
President Gotabaya Rajapaksa had to\u00a0 seek IMF aid due to the surge in oil prices and the loss of tourists because the war in Ukraine exacerbated its foreign exchange crisis.<\/p>\n
The IMF said in its Article IV consultation report, released on Friday in Washington, “the country\u2019s \u201cdebt overhang,\u201d along with persistent fiscal and balance-of-payments shortfalls, \u201cwill constrain growth and jeopardize macroeconomic stability in both the near and medium term.”<\/p>\n
It also said, “\u201cBased on staff analysis, the fiscal consolidation necessary to bring debt down to safe levels would require excessive adjustment over the coming years, pointing to a clear solvency problem.”<\/p>\n
Commotion reigns as Sri Lankans queue up to buy fuel at a fuel pumps in Colombo.
\nThe full report provides further analysis of the South Asian island nation\u2019s debt and finances. A summary of the report released earlier in the month said Sri Lanka faced unsustainable debt levels and needed a \u201ccredible and coherent\u201d strategy to restore stability.<\/p>\n
Negotiations on a possible aid package are expected to start in April, when Finance Minister Basil Rajapaksa, a brother of the president, travels to Washington.<\/p>\n
The spiraling crisis has also led the country to raise interest rates, devalue the local currency and curb non-essential imports.<\/p>\n
Sri Lanka has about $2 billion of reserves against $3.9 billion of foreign-currency debt due for the remainder of 2022, according to Bloomberg calculations based on central bank data. This includes $1 billion of sovereign bonds maturing in July.<\/p>\n
Sri Lanka has to be \u201cprepared to manage the negatives,\u201d Central Bank of Sri Lanka governor Ajith Nivard Cabraal said on Thursday, referring to entering an IMF program, but did not explain further.<\/p>\n
It all probably started when the tourism sector got hit due to the COVID-19 pandemic 2019.\u00a0 The exodus could be the beginning.\u00a0\u00a0Intelligence officers in Tamil Nadu, the report said, have got information that \u201caround 2,000 refugees\u201d are likely to arrive over the next few weeks.<\/p>\n
\u201cConstruction workers and daily wagers are struggling due to inflation across the country\u2026More people are likely to leave the country unless the economy stabilises,\u201d said Suresh Premachandran, who heads Sri Lanka\u2018s political outfit Eelam People\u2019s Revolutionary Liberation Front.<\/p>\n
\u201cConstruction workers and daily wagers are struggling due to inflation across the country\u2026More people are likely to leave the country unless the economy stabilises,\u201d said Suresh Premachandran, who heads Sri Lanka\u2018s political outfit Eelam People\u2019s Revolutionary Liberation Front.<\/p>\n
Sri Lanka is heavily dependent on imports of essential items such as petroleum, food, paper, sugar, lentils, medicines, and transportation equipment. With the Central Bank of Sri Lanka\u2019s foreign exchange reserves ebbing down to around $2.3 billion (17,536 crore rupees) now\u2014nearly half of what it was a year ago\u2014the country has barely any money to pay for these imports or to service its external debt.<\/p>\n
Vladimir Putin\u2019s war<\/a> on Ukraine\u00a0 still refusing to back down even when Ukraine President Volodymyr Zelensky said that his country should accept that it will not become a member of the US-led NATO is still adamant on war, attacking innocent civilians.<\/p>\n The effects of his war and the global response to it will forever change Russia\u2019s economic future, pulling it back 30 years, experts analyse.<\/p>\n As the country\u2019s economy crashes, with the exodus of global brands, it will cause a shift in how middle-class Rusians will make and spend their money.<\/p>\n Experts say the coming period of Russian economic isolation could last at least five years, but more likely will be measured in decades.<\/p>\n What exactly does Putin want from this war?\u00a0 Is it just a show of power, but at the cost of innocent lives including children? This rightfully can be said of every war waged, where innocent children and civilians have been killed.<\/p>\n You might also want to read https:\/\/www.hamslive.com\/news\/2022\/03\/19\/un-rights-office-reported-816-confirmed-civilian-deaths-in-ukraine\/<\/a><\/p>\n