Colombo: Sri LankaThe cabinet has approved a proposal to downgrade the island nation’s economic status to a “low-income country” in order to gain access to concessional funding from international organizations, a cabinet spokesman said on Tuesday.
Sri Lanka’s economy is in a deep recession, shrinking at 8.4% annually in the June quarter, one of the sharpest quarterly declines.
GDP per capita in 2021 was $3,815, placing it in the low-middle economy category. world Bank,
A cabinet spokesman said the cabinet had decided to downgrade the island to “low income” on the World Bank’s list. bandula gunawardene,
Gunawardene said, “Given the severe financial crisis Sri Lanka is facing, representatives of international organizations informed us that access to funding would be easier if Sri Lanka were classified as a low-income country. ”
The South Asian island of 22 million people is grappling with its worst economic crisis since independence in 1948, fueled by COVID-19 in its tourism-dependent economy and reduced remittances from workers abroad, rising oil prices, populist taxes Deduction and brought for seven months. The ban on imports of chemical fertilizers that devastated agriculture last year.
The crisis has led to a severe dollar shortage to pay for food, fuel and drug imports, a depreciating rupee and runaway inflation.
Central Bank of Sri LankaWhich last week kept policy rates stable, is forecasting an 8.7% GDP contraction for 2022.
The World Bank did not immediately respond to a request for comment.
Sri Lanka’s economy is in a deep recession, shrinking at 8.4% annually in the June quarter, one of the sharpest quarterly declines.
GDP per capita in 2021 was $3,815, placing it in the low-middle economy category. world Bank,
A cabinet spokesman said the cabinet had decided to downgrade the island to “low income” on the World Bank’s list. bandula gunawardene,
Gunawardene said, “Given the severe financial crisis Sri Lanka is facing, representatives of international organizations informed us that access to funding would be easier if Sri Lanka were classified as a low-income country. ”
The South Asian island of 22 million people is grappling with its worst economic crisis since independence in 1948, fueled by COVID-19 in its tourism-dependent economy and reduced remittances from workers abroad, rising oil prices, populist taxes Deduction and brought for seven months. The ban on imports of chemical fertilizers that devastated agriculture last year.
The crisis has led to a severe dollar shortage to pay for food, fuel and drug imports, a depreciating rupee and runaway inflation.
Central Bank of Sri LankaWhich last week kept policy rates stable, is forecasting an 8.7% GDP contraction for 2022.
The World Bank did not immediately respond to a request for comment.