Sri Lanka economic crisis: Ranil Wickremesinghe admits Colombo is bankrupt

Prime Minister Ranil Wickremesinghe told parliament Tuesday that Sri Lanka is bankrupt and the acute pain of its unprecedented economic crisis will linger until at least the end of next year.

After the government ran out of foreign currency to import vital goods, the island nation's 22 million people have endured months of galloping inflation and lengthy power cuts.

Warning of a deep recession,Wickremesinghe saidacute shortages of food, fuel, and medicine will continue in theonce-prosperous country.

Addressing the Sri Lankan parliament, the premier said "We will have to face difficulties in 2023 as well. This is the truth. This is the reality."

Depending on finalising a debt restructuring plan with creditors by August, Sri Lanka's ongoing bailout talks with the International Monetary Fund will determine its future.

"We are now participating in the negotiations as a bankrupt country," Wickremesinghe said.

"Due to the state of bankruptcy our country is in, we have to submit a plan on our debt sustainability to them separately. Only when (the IMF) are satisfied with that plan can we reach an agreement."

However, before a deal is struck on a funding arrangement to address its balance of payments crisis, more work is needed to set the nation's finances right and repair its runaway fiscal deficit, according to IMF.

In an effort to conserve fuel, Sri Lanka is currently almost completely without petrol and the government has shut down non-essential public services.

To cope with food shortages and record prices, the United Nations estimates that about 80 per cent of the public are skipping meals.

(With inputs from agencies)

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