Former Prime Minister and UNP leader Hon. Ranil Wickremesinghe says
that a programme with the International Monetary Fund (IMF) is necessary to minimize the impact of the growing debt repayment crisis, because homegrown solutions are not effective.
Furthermore unlike in the past, Sri Lanka’s debt problem has increased at a time when there is a global debt problem. This makes the situation even more challenging and complex. Sri Lanka is a highly import-dependent economy and that compounds the crisis further he noted. The former Prime Minister said that this crisis is largely self inflicted due to poor economic management. The reduction of tax was uncalled for and increased the budget deficit
exponentially. Further he noted that he is so surprised as to why the government did not go for an IMF program in early 2020 knowing very well the foreign income was going to plummet. He further noted that the IMF will not recommend solutions that will aggravate the current economic crisis . SLPP sources say it was PB Jayasundara, Prof Lakshman and SR Attygalle who led the economic strategy and they are responsible for this unprecedented economic crisis. The rating agency Moody has pointed out that funding the latest relief package with reallocations from the budget in part reflects this limited fiscal space, which will constrain the government’s ability to use fiscal policy to mitigate the impact of economic shocks.