Sri Lankan President Ranil Wickremesinghe speaks during the 37th Session of the UN Food and Agriculture Organization Regional Conference for Asia and the Pacific in Colombo, Sri Lanka, Feb 20, 2024. (PHOTO / AP)
COLOMBO - Sri Lanka is committed to repaying its debt within the 2027-2042 schedule, President Ranil Wickremesinghe said on Wednesday, adding that successful debt restructuring negotiations will bring annual external debt payments down to 4 percent of GDP.
The island nation defaulted on its foreign debt in May 2022 after its economy ran into an unprecedented financial crisis triggered by a severe foreign exchange shortage.
Sri Lanka's foreign reserves, which stood at less than $20 million in April 2022 at the height of the country's crisis, have been rebuilt to over $3 billion, said President Ranil Wickremesinghe
Sri Lanka kicked off negotiations with its creditors after securing a $2.9 billion bailout from the International Monetary Fund in September 2022 but has still to reach an agreement with private bondholders.
The country reached an agreement with its bilateral creditors last November.
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Sri Lanka is likely to stay in default until 2027, President Ranil Wickremesinghe told parliament, which would allow time for the island nation to rebuild its economy and return to international financial markets to raise funds to resume debt repayments.
"Sri Lanka's economy commenced its revival in the third quarter of 2023 and international financial institutions have forecast a potential economic growth ranging from 2 percent to 3 percent for 2024," he told lawmakers.
"If government revenue can be maintained at a substantial level then debt servicing will not impose a burden on the country."
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Sri Lanka's foreign reserves, which stood at less than $20 million in April 2022 at the height of the country's crisis, have been rebuilt to over $3 billion, Wickremesinghe added.
