Today, the Asian Development Bank (ADB) authorized a $350 million special policy-based loan to help Sri Lanka stabilize its economy through budget support.
The initiative, according to a statement from the ADB, is a component of a larger package of financial aid for the nation that is supported by the International Monetary Fund’s Extended Fund Facility and aims to stabilize the economy and build the groundwork for long-term recovery and growth.
Sri Lanka is currently experiencing a catastrophic and unheard-of economic catastrophe. High inflation has reduced buying power, impacted lives, and reversed previous development achievements.
“ADB is concerned about the deep crisis in the country and its impact on the people of Sri Lanka, especially the poor and the vulnerable, particularly women,” said ADB President Masatsugu Asakawa. “ADB is committed to standing with Sri Lanka as it addresses its present challenges and strides toward economic stabilization, sustainable recovery, and inclusive growth.”
To address the root causes of its internal and external imbalances and get back on a sustainable debt trajectory, Sri Lanka has started a major reform process. The country must be steadfast in implementing the necessary reforms, which include boosting tax revenue collection, strengthening public financial management, improving the performance of state-owned enterprises, ensuring the autonomy and independence of the central bank, preserving the stability of the financial sector, and strengthening governance frameworks, as the road to recovery is long. It is critical to make sure that sufficient social protection is offered while these policies are put into action. It will be crucial to put governance changes and anticorruption measures into effect.
