Sri Lanka needs to print one trillion rupees to keep economy afloat, inflation could hit 40 per cent, PM says

Sri Lanka is reeling from an economic crisis, as a shortage of foreign currency severely curtailed imports of essentials, triggering months of protests

Inflation could rise above 40 per cent as the government rolls back fuel subsidies and prints more money to keep the economy afloat Wickremesinghe said

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Ranil Wickremesinghe, newly appointed prime minister, of Sri Lanka says he will slash expenditures in his new budget. Photo: Reuters

Published: 9:30am, 25 May 2022Updated: 3:31pm, 25 May 2022

Sri Lanka’s Prime Minister Ranil Wickremesinghe will hold dual charge as finance minister, the president’s office announced on Wednesday, and will lead talks with the International Monetary Fund (IMF) as the crisis-hit nation seeks a bailout.

“Prime Minister Ranil Wickremesinghe was sworn in as finance, economic stabilisation and national policies minister before President Gotabaya Rajapaksa this morning,” a statement from the president’s office said.

In an interview with Reuters on Tuesday, Wickremesinghe laid out his immediate plans for the economy, including presenting an interim budget within six weeks that will slash government expenditure “to the bone” and divert funds into a two-year relief programme.

Wickremesinghe, who took office two weeks ago, warned inflation would rise as the government gets down to tackling the crisis, and there could be more protests.

He said he hoped any unrest would not get out of hand, adding that funds would be made available to help the most vulnerable of the country’s 22 million people.

“Looking at the hard days ahead, there has to be protest. It’s natural when people suffer, they must protest,” Wickremesinghe said in an interview at the colonial-era prime minister’s office in the commercial capital Colombo.