Sri Lanka will look to borrow $4 billion from the International Monetary Fund (IMF) to help tackle a widening balance of payment deficit, reports Sundaytimes.lk.
A senior government official, who wished to remain anonymous said that there was a proposal to borrow US $4 billion to support reducing the increasing deficit in Sri Lanka’s balance of payments.
However sources at the treasury told the Sundaytimes.lk that the new government will have to impose austerity measures, increase taxes, reduce welfare programmes and cut subsidies to state owned enterprises to sustainably help tackle the financial crisis.
In March 2015 Sri Lanka’s balance of payments reduced to a negative $791.7 million. Sri Lanka’s fiscal year has seen its balance of payments reduce from a $1.954 million surplus to a widening deficit within the space of a year.
Sri Lanka's finance ministry has also reported on a widening trade deficit which has widened by 15.6 percent to $4 billion.
Earlier this year, the IMF rejected a $4 billion bailout request by Sri Lanka’s finance minister.
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