প্রকাশ: 07/06/2022
Sri Lanka will need
$5 billion over the next six months to ensure basic living standards, and is
renegotiating the terms of a yuan-denominated swap worth $1.5 billion with
China so as to fund essential imports, the prime minister said on Tuesday.
The island nation's worst economic crisis in seven decades
led to a shortage of foreign exchange that stalled imports of essential items
such as fuel, medicine and fertiliser, provoking devaluation, street protests
and a change of government.
To tide over the turmoil, Sri Lanka will need about $3.3
billion for fuel imports, $900 million for food, $250 million for cooking gas
and $600 million more for fertiliser this year, Prime Minister Ranil
Wickremesinghe told parliament.
The central bank has estimated the economy will contract by
3.5% in 2022, Wickremesinghe said, but added that he was confident growth could
return with a strong reform package, debt restructuring and international
support.
"Only establishing economic stability is not enough, we
have to restructure the entire economy," said Wickremesinghe, who is
working on an interim budget to balance battered public finances.
"We need to achieve economic stability by the end of
2023."
The Indian Ocean nation of 22 million is negotiating a loan
package worth about $3 billion from the International Monetary Fund, in
addition to help from countries such as China, India and Japan.
On Tuesday, the cabinet approved a $55-million credit line
from India's Exim Bank to fund 150,000 tonnes of urea imports - a critical
requirement as supplies have run out during the current cropping season.
"Farmers do not need to be worried about not having
inputs for the next season," cabinet spokesman Bandula Gunawardena told
reporters, estimating that 150,000 tons of urea would be needed for the next
cultivation cycle.
While food inflation of 57% is partly driven by higher
global commodity prices, a depreciated currency and low domestic production, it
is estimated that yields from the next harvest will be halved by the lack of
fertiliser.
The United Nations is set to make a worldwide public appeal
for Sri Lanka on Wednesday, and has pledged $48 million for food, agriculture
and health, Wickremesinghe said.
Sri Lanka was also renegotiating with China the terms of a
yuan denominated swap worth $1.5 billion agreed last year.
The initial terms provided that the swap could only be used
if Sri Lanka maintained reserves equivalent to three months of imports.
But with reserves now well below that level, Sri Lanka has
to request China to reconsider the requirement and allow the swap to proceed,
Wickremesinghe said.
Wickremesinghe, who is also finance minister, will unveil an
interim budget next month that he said aims to slash government expenses and
looks to increase annual welfare spending to $500 million from about $350
million.
– Reuters
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