Sri Lanka’s economy to contract by more than 6% in 2022 – CBSL governor

Sri Lanka’s economy is likely to contract by more than 6 percent in 2022 as political instability and social unrest affect discussions on financial relief with the International Monetary Fund (IMF), the country’s central bank governor, Nandalal Weerasinghe, told The Wall Street Journal in an interview.

“This year the contraction will be much higher, maybe higher than 6 percent contraction,” he told the Journal, referring to the pandemic-affected 2020, when the economy shrank 3.5 percent.

He said that a stable political administration is urgently needed to progress discussions with the IMF on key structural reforms, as well as to secure short-term bridge financing from other countries and multilateral agencies to help pay for key imports like fuel, pharmaceuticals and fertilizers.

According to Bloomberg, IMF Managing Director Kristalina Georgieva said debt-restructuring talks with Sri Lanka will proceed quite quickly, as soon as a new government is in place.

-Agencies

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