Sri Lanka secures $2.9bn IMF bailout for struggling economy

[Social Media]

Sri Lanka has secured a $2.9bn (£2.3bn) bailout from the International Monetary Fund (IMF) as it faces its worst economic crisis since independence.

The deal has been nearly a year in the making and a lifeline for the country that has billions of dollars in loans.

Foreign minister Ali Sabry told the BBC the government will raise funds by restructuring state-owned enterprises and privatising the national airline.

However, analysts warned Sri Lanka still faces a tough road ahead.

The country's economy has been hit hard by the pandemic, rising energy prices, populist tax cuts and inflation of more than 50%.

• Why is Sri Lanka in crisis?
• The daily heartbreak of life in a country gone bankrupt

[herfiehandbag]

It will only help if it is used to improve the lot of the people, not spent on shoring up the gangster clans in government or paying off foreign debtors.

 

The hold of the political clans needs to be broken, and the opportunity taken to get the economy working again. Then they can look to restructuring and paying off loans.

 

 

 

[heybruce]

If the money is used to pay the $6.5 billion owed to China, the IMF will not loan to Sri Lanka or any other country in debt to the Chinese ever again.

[Eric Loh]

1 hour ago, herfiehandbag said:

It will only help if it is used to improve the lot of the people, not spent on shoring up the gangster clans in government or paying off foreign debtors.

 

The hold of the political clans needs to be broken, and the opportunity taken to get the economy working again. Then they can look to restructuring and paying off loans.

 

 

 

The $2.9 billion IMF loan will help to keep the government running but is far from sufficient to pay for the $51 billion in foreign debt that pushed the country into a financial crisis. The economy will recover but will need re-structuring of debts and generosity from Japan, ADB and China. China has confirmed offer to Sri Lanka of debt moratorium for 2 years. That's only 10% of the foreign debts. The economy has to be re-structured as the country is spending more than it can earn. Corruption takes a big chunk off the economy. Nice country and people.