Sri Lanka is warning sign for countries with high debt levels, says IMF Director
Colombo: International Monetary Fund Managing Director Kristalina Georgieva has said Sri Lanka has become a warning sign for those countries with high debt levels and limited policy space.
Georgieva made the remark at the hybrid meeting of the G20 Finance Ministers and Central Bank Governors held in Indonesia
"As a result, later this month we will project a further downgrade to global growth for both 2022 and 2023 in our World Economic Outlook Update. Moreover, downside risks will remain and could deepen -- especially if inflation is more persistent -- requiring even stronger policy interventions which could potentially impact growth and exacerbate spillovers particularly to emerging and developing countries. Countries with high debt levels and limited policy space will face additional strains. Look no further than Sri Lanka as a warning sign," she was quoted as saying by Daily Mirror.
Sri Lanka’s multiple crises have been exacerbated by the COVID-19 pandemic which saw the collapse of the crucial tourism industry, which provides foreign currency for imported fuel and medical supplies, and rocked by the supply chain crisis precipitated by the Ukraine war.
Some 22 per cent of the population are food insecure and in need of assistance said the World Food Programme last month, and the UN has launched a joint Humanitarian Needs and Priorities Plan, requesting more than $47 million to aid around 1.7 million of the worst impacted.