07 May 2024, 16:50

Sri Lanka polls could risk economic recovery: central bank chief

COLOMBO, May 7, 2024 (BSS/AFP) - Sri Lanka's tentative recovery from its 
worst economic crisis could be stalled by presidential elections due later 
this year, the island nation's central bank chief warned Tuesday.

Months-long shortages of food, fuel and medicines culminated in Sri Lanka 
defaulting on its foreign debt in 2022 and angry protests that led to the 
ouster of then-president Gotabaya Rajapaksa.

His successor Ranil Wickremesinghe has introduced austerity measures 
including sharp tax hikes, and cracked down hard on anti-government 

Nandalal Weerasinghe said the crisis-hit economy had stabilised thanks to 
tough reforms prompted by an International Monetary Fund rescue package, but 
the country was not completely out of the woods.

"Domestically, what I see as the challenge is to continue the same policies 
going forward irrespective of the administration," Weerasinghe said. "That is 
an important one."

Wickremesinghe's party has indicated that he will seek a fresh term at the 
elections due in September or October. 

His two main rivals have said they wants to renegotiate terms of the IMF 
bailout, reduce taxes and increase food and energy subsidies.

Last month, the Asian Development Bank also warned that Sri Lanka's recovery 
could be stalled by abrupt policy changes after elections if the outcome 
weakened the government's commitment to austerity measures. 

Foreign lenders have also warned that any delay in restructuring Sri Lanka's 
foreign debt could impact the economy.

Sri Lanka had expected a deal with foreign lenders -- including China, its 
single biggest bilateral creditor -- by the end of March, but so far no 
accord has been announced.


  • Latest News
  • Most View