Sri Lankan PM says economy ‘collapsed’, oil cannot be bought – Boston News, Weather, Sports

COLOMBO, Sri Lanka (AP) – Sri Lanka’s prime minister says its debt-ridden economy has “collapsed” after months of lack of food, fuel and electricity and the South Asian island nation cannot even buy imported oil.

“We are now facing a much more serious situation that goes beyond the mere shortage of fuel, gas, electricity and food. Our economy has completely collapsed. This is the most serious problem we face today,” Prime Minister Ranil Wickremesinghe told Parliament.

Wickremesinghe is also the finance minister tasked with stabilizing the economy, which is collapsing under the weight of high debt, lost tourism revenue and other effects of the pandemic and rising costs of raw materials.

“Currently, Ceylon Petroleum Corporation owes $700 million in debt,” he told lawmakers. “As a result, no country or organization in the world is willing to provide us with fuel. They are even reluctant to provide fuel for cash,” he said.

Wickremesinghe said the government failed to act in time to reverse the situation as Sri Lanka’s foreign exchange reserves dwindled.

“If measures had been taken at least from the beginning to slow down the economic collapse, we would not be facing this difficult situation today. But we missed this chance. We’re now seeing signs of a possible crash to bottom,” he said.

Sri Lanka has muddled through, helped largely by $4 billion in credit lines from neighboring India. But Wickremesinghe said India could not keep Sri Lanka afloat for too long.

Sri Lanka has already announced that it is suspending repayments of $7 billion in external debt due this year pending the outcome of bailout negotiations with the International Monetary Fund. By 2026, it will have to pay an average of $5 billion annually.

The foreign exchange crisis has led to massive shortages, which have forced people to stand in long lines to buy essentials, including fuel, cookware and medicines.

(Copyright (c) 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, transcribed or redistributed.)

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https://whdh.com/news/sri-lanka-pm-says-economy-has-collapsed-unable-to-buy-oil/ Sri Lankan PM says economy ‘collapsed’, oil cannot be bought – Boston News, Weather, Sports

Nate Jones

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