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Sri Lanka’s new government plans Tuesday to present an amended budget for the year that slashes expenses and aims to provide relief to people hit hard by the country’s economic meltdown.
President Ranil Wickremesinghe, who is also the finance minister, will present the budget in Parliament, which will voted on it after a debate.
The government is negotiating with a visiting International Monetary Fund team on a program to rescue Sri Lanka from its economic crisis. The government is also preparing to negotiate a restructuring of foreign loans Sri Lanka is unable to repay because of a severe foreign exchange shortage.
Prior to the visit, the IMF said in a statement because Sri Lanka’s public debt is unsustainable, the IMF’s executive board will need assurances by Sri Lanka’s creditors that debt sustainability will be restored before any bailout program begins.
Sri Lanka’s total foreign debt exceeds $51 billion — of which it must repay $28 billion by 2027.
The IMF delegation is expected to conclude its visit Wednesday and the government hopes to reach a preliminary agreement by then.
Sri Lankans have faced acute shortages of essentials like fuel, medicine, and cooking gas for months. Though cooking gas supplies were restored through World Bank support, shortages of fuel, critical medicines and some food items continue.
Long fuel lines are reappearing after a quota system seemed to have brought them under control over the past weeks.
