Colombo, March 6 (IANS) Financially-broke Sri Lanka seeks a debt default till 2027 from both local and international lenders to ease the debt burden on the country’s GDP.
Sri Lanka President Ranil Wickremesinghe announced in Parliament that by 2022, the country was slated to repay nearly $6 billion in foreign debt annually, amounting to about 9.5 per cent of the GDP, a considerable strain for any nation.
The President claimed that the South Asian island nation faces a significant burden of debt.
“Currently, we are actively engaged in discussions regarding the restructuring of all loans, including domestic and foreign loans. We are optimistic that these negotiations will reach a successful resolution soon. Our goal is to obtain temporary relief from debt defaults from 2023 to 2027,” Wickremesinghe said presenting its plans to repaying the loans in the period from 2027 to 2042.
“Through successful negotiations for debt restructuring, we aim to alleviate this burden by reducing the annual foreign debt payments to 4.5 per cent of the GDP, a substantial halving of the previous percentage,” President Wickremesinghe said in a special statement in the Parliament on Wednesday.
Going through a severe economic crisis and a dollar crunch, Sri Lanka defaulted on its foreign debt in May 2022 and declared that the country was bankrupt.
At the end of September, Sri Lanka’s overall debt was at $91 billion.
To help temper sky-rocketing inflation and increase foreign exchange reserves, Sri Lanka struck a $2.9 billion bailout package with the International Monetary Fund in March last year.
In April 2023, India together with Japan and France came to help debt-ridden Sri Lanka initiating a common platform for talks among bilateral creditors to coordinate restructuring Sri Lanka’s debt.
However, China, Sri Lanka’s biggest single bilateral lender, accounting for around 10 per cent of total foreign debt stayed away from the joint effort.
As of June 2023 China held 52 per cent of Sri Lanka’s bilateral debt while Japan, the second largest creditor held 20 per cent, followed by India at 12 per cent and France at three per cent.
–IANS
sfl/khz
Disclaimer
The information contained in this website is for general information purposes only. The information is provided by TodayIndia.news and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of TodayIndia.news We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, TodayIndia.news takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
For any legal details or query please visit original source link given with news or click on Go to Source.
Our translation service aims to offer the most accurate translation possible and we rarely experience any issues with news post. However, as the translation is carried out by third part tool there is a possibility for error to cause the occasional inaccuracy. We therefore require you to accept this disclaimer before confirming any translation news with us.
If you are not willing to accept this disclaimer then we recommend reading news post in its original language.
