Finance Minister Basil Rajapaksa and Secretary to the Ministry left for India on Tuesday to seek a USD $1 billion credit facility from India, to import food, essential items and medicine.

The trip comes as officials from the International Monetary Fund (IMF) visit the Island to hold talks with the Rajapaksa regime to discuss the current economic crisis. Last week the IMF released a summary of their Article IV consultation which stressed the need for the government to implement a strategy to deal with 'Unsustainable levels' of debt. 

It highlighted that foreign reserves would continue to remain low. The dwindling reserves have led to country to experience shortages of fuel, medicine and food as imports are drastically reduced. 

"Due to persistent external debt service burden, international reserves would remain inadequate, despite the authorities’ ongoing efforts to secure FX financing from external sources." The statement noted. 

Inflation increased to 14 per cent in January and the IMF projects it will remain in double-digits in the coming quarters, exceeding the targeted increase of 4-6 percent. 

"GDP growth is projected to be negatively affected by the impact of the FX shortage and macroeconomic imbalances on economic activities and business confidence. Inflation recently accelerated to 14 percent (y/y) in January 2022 and is projected to remain double-digit in the coming quarters, exceeding the target band of 4–6 per cent, as strong inflationary pressures have built up from both supply and demand sides since mid‑2021."

The cost-of-living crisis in Sri Lanka has impacted everyone across the Island, essential food items are skyrocketing in price both due to inflationary pressure and reduced imports. 

Read more at the Daily Mirror