Sri Lanka’s Prime Minister says economy has collapsed

22 June 2022, 10:04

Waiting to buy fuel in Colombo
Sri Lanka Crisis. Picture: PA

Ranil Wickremesinghe said his country is unable to purchase imported fuel, even for cash.

Sri Lanka’s prime minister has said its debt-laden economy has “collapsed” after months of shortages of food, fuel and electricity.

Prime Minister Ranil Wickremesinghe told Sri Lanka’s parliament on Wednesday that the South Asian country is “facing a far more serious situation beyond the mere shortages of fuel, gas, electricity and food. Our economy has completely collapsed.”

Mr Wickremesinghe is also the finance minister tasked with stabilising the economy.

He said Sri Lanka is unable to purchase imported fuel, even for cash, due to heavy debts owed by its petroleum corporation.

He said the government missed out on the chance to turn the situation around, and warned that “we are now seeing signs of a possible fall to rock bottom”.

Ranil Wickremesinghe
Sri Lanka’s Prime Minister Ranil Wickremesinghe (AP)

“Currently, the Ceylon Petroleum Corporation is $700 million in debt,” he told legislators.

“As a result, no country or organisation in the world is willing to provide fuel to us. They are even reluctant to provide fuel for cash.”

Sri Lanka has been muddling through mainly supported by four billion dollars (£3.25 billion) in credit lines from neighbouring India.

But Mr Wickremesinghe said India would not be able to keep Sri Lanka afloat for too long.

Sri Lanka has already announced that it is suspending repayment of seven billion dollars (£5.7 billion) in foreign debt due for repayment this year, pending the outcome of negotiations with the International Monetary Fund on a rescue package.

It must pay five billion dollars (£4.07 billion) on average annually until 2026.

The foreign currency crisis has resulted in massive shortages that have forced people to stand in long queues to buy essentials, including fuel, cooking as and medicine.

By Press Association

Latest World News

See more Latest World News

Rudy Giuliani speaking

Rudy Giuliani targeted in criminal probe of 2020 Georgia election

Trump FBI

US Justice Department opposes unsealing document for Mar-a-Lago warrant

Heathrow airport to extend flight passenger cap

Heathrow airport to extend flight passenger cap until end of October half term in bid to limit chaos

Soldiers’ equipment

Three Britons among five people on trial in separatist-controlled Ukraine

Latvia US

US defence secretary tests positive for Covid-19 for second time

R Kelly

R Kelly jury selection begins over trial-fixing allegations

Russia Navalny

Kremlin critic Navalny says he is in solitary confinement

Kenya Election

Kenya’s deputy president Ruto declared election winner

Ikea Shanghai

Shoppers rush the doors in Shanghai Ikea after flash Covid lockdown ordered

Russia Ukraine War

Russian shells slam into eastern Ukraine, killing three

Norway Bridge Collapse

Drivers rescued as bridge in Norway collapses

The propagandist posted images of himself at the HQ on Telegram

Ukraine blows up Russia's 'Wagner mercenary HQ' after street sign gives away location

Armenia Explosion

Death toll in Armenia fireworks depot blast reaches six

Afghanistan

Afghanistan marks one year since Taliban seizure as woes mount

Adele Milloz

World champion ski mountaineer Adele Milloz dies after fall while climbing in the Alps

Myanmar Suu Kyi

Myanmar court convicts Suu Kyi on more corruption charges