English News

  • youtube
  • facebook
  • twitter

By 2035, Sri Lanka may be left with no money even to pay pensions, says former PM

Former Sri Lankan Prime Minister Ranil Wickremesinghe

In a shocking revelation, Sri Lanka’s former Prime Minister and leader of the United National Party Ranil Wickremesinghe has said that the island nation will have no money left to even pay pensions by 2035. The leader talking to social media activists said that the country’s economy had started to collapse even before the outbreak of Covid 19 pandemic.

“The government will have no money by 2035 to pay pensions. Today there is no foreign exchange for the country. No local income,” Daily News quoted him as saying. He said that foreign exchange reserves in other countries have not depleted the way they have in Sri Lanka.

Also read: Sri Lanka seeks World Bank loan to fight Covid after financial meltdown

Wickremesinghe added that the crisis has further crippled the economy.

As the country’s foreign exchange reserves fell to abysmally low levels, Sri Lanka’s President Gotabaya Rajapaksa declared a state of economic emergency on August 31 with the aim of preventing hoarding of essential items which included rice and sugar.

By 25 July, Sri Lanka had managed to repay a billion dollar bond in foreign currency debt, but two more payments – two bonds of $1.5 billion and $1.25 billion – of debt are due in 2022 and 2023, the Policy Forum said.

Also read: India– Sri Lanka's 2nd largest trading partner– worried as economic crisis hits the island nation

The Rajapaksa government has also put in place a ban on imports of motor vehicles, agricultural products, and consumer durables to contain outflow of the foreign exchange reserves.

In July, Sri Lanka’s forex reserves dropped to $2.8 billion. However, in September it rose to $3.55 billion as it received assistance from IMF’s special drawing rights. While Sri Lanka received $787 million from the International Monetary Fund’s (IMF) special drawing rights (SDR) allocation, Dhaka extended $150 million from Bangladesh Central Bank under a currency swap arrangement.