Sri Lanka seeks $700 mln World Bank loan to overcome revenue shortfall
The Sri Lankan government is seeking US $7OO million assistance from the World Bank following the Treasury’s failed effort to get budgetary support of $1 billion from the International Monetary Fund (IMF), informed sources said.
The Treasury is eyeing cheaper funds for development work and urgent expenditure from international donor agencies, a senior government official said.
A discussion on obtaining financial assistance from the World Bank was held at the Finance Ministry in Colombo recently with the participation of World Bank representatives, Dr. Jayasundera and several ministry officials, he disclosed. The Treasury urgently needs money to meet the fuel import bill and part of the foreign funding will be used tackle this problem, he said. However no final decision was made at the meeting as the government has still not dropped the idea of seeking an IMF facility though it was refused earlier, he added.
Other sources said the Government has borrowed Rs. 410 billion from state banks at an interest of 17 per cent to pay salaries of government servants.
Economist and Member of Parliament Dr. Harsha de Silva has warned that Sri Lanka was relying too much on foreign debt and that measures must be taken to boost both exports and FDIs in order to achieve sustainable economic growth.
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