Sri Lanka confident to onboard China this month for debt restructuring
Sri Lanka, by end of this month, is hoping to get China’s approval for debt restructuring, Dr. Nandalal Weerasinghe, Governor Central Bank told an economic forum earlier this week.
Speaking at the Sri Lanka Economic Summit 2022 by the Ceylon Chamber of Commerce themed ‘Resetting from Turmoil to Opportunity’ held at the Shangri-La hotel in Colombo on Monday, he said that if China gives its assurance in December, Sri Lanka expects to receive the International Monetary Fund (IMF) Board’s approval for financial assistance by next month.
But the priority is to get a compromise with Sri Lanka’s creditors on their support for debt restructuring. “We are currently engaged in obtaining their assurances. We have seen considerable progress in this regard. The Paris Club and India have already given their assurance in favour of Sri Lanka,” Dr. Weerasinghe said.
The talks with China to get a consensus on debt restructuring started in November, but it was late. “If China’s assurance had been received in November as was planned then the IMF Board’s approval for financial assistance would have been received in December. However, the delay in China’s talks has prevented this.”
At the inauguration, President Ranil Wickremesinghe pointed out the country does not need economic reforms that don’t solve the ongoing crisis, but a strong new economic system that can face 2050.
He added the debt must be restructured and a correct economic system should be introduced noting that it is possible to get IMF assistance to overcome this situation as the government has reached a staff-level agreement with the IMF.
Discussions with China on debt restructuring were delayed due to the 20th National Congress of the Chinese Communist Party, he said noting that these talks will be expedited now that the congress has ended. “China has no objections to restructuring Sri Lanka’s debts.”
World Bank Vice President for South Asia Martin Raiser in his remarks said that improved economic governance, tougher private-sector competition, and better targeted social protection are the three priorities for Sri Lanka to reset from turmoil to opportunity.
As Sri Lanka is pressed to make challenging decisions and has no room for any mistakes, it should ideally take a fresh look at three main dimensions of its economic recovery, National Institution for Transforming India (NITI) CEO Parameswaran Iyer said.
Revitalising and rationalising the existing value chains so that the service sector is strengthened, and reviving tourism is important, he added.
“Sri Lanka possesses the potential to emerge as a stronger and more resilient economy,” he said delivering the keynote address.
There are many opportunities to leverage the advantage or proximity with India, the world’s third-largest economy in public private partnership terms, Mr. Iyer said, in a video message.
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!