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HomeEconomySri Lankan PM Wickremesinghe said – economy collapsed, unable to buy oil ...
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Sri Lankan PM Wickremesinghe said – economy collapsed, unable to buy oil MPNRC

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United National Party leader Ranil Wickremesinghe was sworn in as the Prime Minister of Sri Lanka on May 12, 2022 in Colombo. (ANI photo)

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

“Now we are facing a much more dire situation than shortage of fuel, gas, electricity and food. Our economy has completely collapsed. This is the most serious issue before us today,” Prime Minister Ranil Wickremesinghe told Parliament.

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Wickremesinghe is also the finance minister tasked with stabilizing the economy, which is under burden of heavy debt, lost tourism revenue and other impacts from the pandemic and rising costs for commodities.

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“Currently, Ceylon Petroleum Corporation is in debt of $700 million,” he told lawmakers. “As a result, no country or organization in the world is ready to provide us with fuel. They are also shying away from providing fuel for cash.”

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Wickremesinghe said the government had failed to act in time to reverse the situation, as Sri Lanka’s foreign reserves have dwindled.

“If steps had been taken to slow the collapse of the economy at least initially, we would not be facing this difficult situation today. But we missed this opportunity. We are now seeing signs of a possible downtrend to rock bottom,” he said.

Sri Lanka is mainly backed by credit lines worth $4 billion from neighboring India. But Wickremesinghe said that India will not be able to save Sri Lanka for long.

Sri Lanka has already announced that it is suspending repayment of $7 billion in foreign debt due for repayment this year, pending the outcome of talks with the International Monetary Fund on a rescue package. It will have to pay an average of $5 billion annually by 2026.

The foreign exchange crisis has led to huge shortages forcing people to stand in long lines to buy essential items including fuel, cooking and medicine.

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