Debt-stricken Sri Lanka signs trade pact with Thailand as it seeks ‘recovery’
- Sri Lanka’s government expects the trade pact would boost two-way trade up to US$1.5 billion
- The island nation has been struggling with an economic crisis since declaring bankruptcy in April 2022 with more than US$83 billion in debt
Sri Lanka’s president on Sunday said the cash-strapped nation was “gradually” emerging from its worst economic crisis, a day after the signing of a free-trade deal with Thailand.
Recalling the “indignity of being labelled a financially bankrupt country”, President Ranil Wickremesinghe dispensed with the customary annual Independence Day address in favour of a brief statement.
“Throughout this journey, challenges will gradually dissipate, life’s burdens will lighten, the economy will fortify,” Wickremesinghe said. “It is imperative that we obtain insights from past mistakes and avoid their repetition.”
On Saturday, the Sri Lanka Thailand Free Trade Agreement covering trade in goods, investment, custom procedures and intellectual property rights was signed in Colombo in the presence of Wickremesinghe and Thai Prime Minister Srettha Thavisin.
Sri Lanka began talks with Thailand on a free-trade agreement in 2016.
The countries’ two-way trade was worth about US$352 million in 2022, with Thailand’s exports at US$292 million and Sri Lanka’s exports at US$58 million, according to Sri Lankan government’s data.
Sri Lanka exports include mainly precious stones, apparel, tea and spices, while exports from Thailand include smoked rubber sheets, natural rubber, plastic and cement. Sri Lanka’s government expects the trade pact would boost two-way trade up to US$1.5 billion.
