2023-12-20 14:19:14
The World Bank announced on Wednesday that it had released 250 million dollars (228 million euros) to support economic reforms in Sri Lanka, which has been bankrupt since last year’s financial crisis.
This second and final tranche of a total amount of $500 million is paid “taking into account the continued and satisfactory progress made by the government with the reform program”, affirmed the institution.
Sri Lanka has doubled taxes, removed subsidies on fuel and electricity, introduced anti-corruption legislation in line with the expectations of financial institutions, under the leadership of new President Ranil Wickremesinghe.
This payment comes a week following the relaunch of the bailout plan of 2.9 billion dollars (2.65 billion euros) from the International Monetary Fund (IMF), following an agreement between Sri Lanka and China, its largest creditor.
The IMF thus paid a second tranche of $337 million of this plan, known as the Extended Financing Facility (EFF) and which is spread over four years.
In the third quarter, gross domestic product (GDP) grew by 1.6%, while it had contracted by 11.5% over the same period a year earlier, according to the central bank. Despite this improvement, the economy remains down 4.9% over the first nine months of 2023.
The IMF expects the country’s economy to contract by 3.6% this year.
Sri Lanka defaulted on its $46 billion debt last April due to a lack of foreign exchange to pay for imports of food, fuel, medicine and other essentials, leading to several months of shortages.
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