Darker days ahead, Ranil warns, ruling out V-shaped economic recovery

Need to take global trends into consideration stressed

By Saman Indrajith

UNP leader Ranil Wickremesinghe said in Parliament on Tuesday that it was most unlikely that the country would experience a V-shaped economic recovery owing to the global economic downturn and the local issues which Sri Lanka had created on its own.

Participating in the second reading debate on Budget 2022, he said: “The supply chains in the US, Europe and Japan are expected to fall. Japan’s GDP has decreased by one percent while China is facing an energy crisis. That affects Korea and Japan. We must take such developments into consideration. In addition, there are other local issues which Sri Lanka has created on its own. Sri Lanka’s economy is dependent largely on imports whether we like it or not. Economy has suffered due to import restrictions. Foreign reserves have come down to US$ 2 billion out of which gold reserves account for US$ 300 million. One cannot go along with a foreign reserves at US$ 1.7 billion. Local banks are functioning with non-performing loans. Total non-performing loans in Sri Lankan banks accounts are between Rs. 4,000 billion and Rs. 6,000 billion. Just remember Sri Lanka’s GDP is Rs. 18,000 billion.”

“Sri Lanka faces an annual foreign debt service of US$ 500 million,” he said, adding that the country would face a greater economic crisis.