Sri Lanka’s prime minister, “in a deep recession… official recognition of national bankruptcy”

Prime Minister Ranil Wickremesinghe of Sri Lanka. [사진 제공: 연합뉴스]

The default, or default, Sri Lankan prime minister has officially acknowledged that his economy is bankrupt and fears the predicament will continue into the coming year.

According to foreign media such as AFP and Sri Lankan media on the 6th local time, Prime Minister Ranil Wickremesinghe said in a parliamentary session the day before, “The once prosperous country will plunge into a deep recession this year, and the extreme shortage of fuel, food and medicine will continue.” .

Prime Minister Wickremesinghe warned that “we will run into trouble next year”.

Regarding the ongoing bailout negotiations with the International Monetary Fund (IMF), he said, “Now we are engaged in negotiations as a bankrupt country” and that he will submit a debt restructuring plan by the end of August.

Prime Minister Wickremesinghe added that “due to the state of the country’s bankruptcy, we also have to submit a separate plan for the possibility of debt maintenance,” adding that the IMF must be satisfied with the plan before reaching an agreement.

It is known that Sri Lanka is expecting a bailout of about 3 billion US dollars and 3.9 trillion Korean won in negotiations with the International Monetary Fund (IMF).

The International Monetary Fund (IMF) said it had made significant progress in recent financial aid negotiations in Sri Lanka, noting that Sri Lanka must reduce its debt to a sustainable level and implement extensive tax reform.

The Sri Lankan government declared a ‘temporary default’ on April 12, stating that it would defer the repayment of external debt until the IMF bailout negotiations were completed, and entered an official default state on May 18.

Sri Lanka faced the worst economic hardship as the tourism sector, its main industry, collapsed and external debt skyrocketed, and fiscal policy failures such as excessive tax cuts also overlapped.

Due to the lack of foreign currency, imports of fuel, medicines, food, etc. have also practically stopped, and long lines to buy oil at gas stations have occurred, and some have died in the process.

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