Next couple of months ‘most difficult’ for Sri Lankans: PM Ranil

Sri Lankan Prime Minister outlines proposals including new Budget, privatisation of national carrier, printing more money to combat crisis 

Sri Lankan Prime Minister Ranil Wickremesinghe on Monday warned citizens that the coming months would be the “most difficult ones” of their lives, with likely 15-hour power cuts, and a further price increase in fuel and gas, just as he outlined plans to arrest the island’s rapid economic decline.

“To ease the queues, we must obtain approximately $75 million within the next couple of days. At the moment, we only have petrol stocks for a single day,” he said in a televised address, his first after assuming charge as Prime Minister on May 12.

President Gotabaya appointed Mr. Wickremesinghe as Premier days after Mahinda Rajapaksa resigned, amid citizens’ protests demanding the Rajapaksa clan’s resignation over the country’s dire economic crisis.

Mr. Wickremsinghe made a host of proposals, including a “new alternative Budget”, privatisation of the country’s loss-making national carrier Sri Lankan Airlines, and printing more money to pay state sector employees, and asked people to “prepare to make some sacrifices.”

A realistic projection of the country’s revenue for the year stood at LKR 1.6 trillion, he said, while the total government expenditure is an estimated LKR 4 trillion. The budget deficit for the year is SLR 2.4 trillion, or 13% of the GDP.

“In November 2019, our foreign exchange reserves were at $7.5 billion. However, today, it is a challenge for the treasury to find $1 million. The Ministry of Finance is finding it difficult to raise $5 million required to import gas,” he said, pointing to Sri Lanka’s depleting foreign reserves. While Mr. Wickremesinghe’s address included possible help from “foreign allies”, it was silent on the government’s plans to boost domestic production, especially amid a drastic drop in annual harvest, following an abrupt switch to organic farming, that has raised fears of starvation.

Speaking on the unavailability of dollars to import fuel Mr. Wickremesinghe said under the Indian credit line, two more diesel shipments are due to arrive on May 18 and June 1, apart from the two petrol shipments expected on May 18 and 29. India has so far sent 12 shipments and over 4,00,000 MT of fuel under the Line of Credit.