The president’s office clarified earlier statements made by a cabinet spokeswoman on Tuesday, stating that Sri Lanka will continue to be a middle-income country but ask the World Bank to award it some loans typically given to impoverished countries. The 22 million-person island nation is experiencing its worst economic crisis in more than seven decades, and a spokeswoman earlier in the day stated that the government will work to shift its economic classification to ‘low-income country’ in order to get money more easily.
The status change, according to the office of President Ranil Wickremesinghe, will not take place. According to the office, Sri Lanka ‘shall remain a middle-income country. We shall seek that the International Development Association (IDA) grant the country permission to receive loans’.
In order to fight poverty, the World Bank’s IDA branch provides grants and loans with zero or low interest rates to the world’s poorest countries. A request from Sri Lanka was not promptly answered by the World Bank’s Colombo branch. It stated that the ‘primary goal’ was to move through with the debt restructuring and economic reforms to restart the nation’s economy and added that it would continue to communicate with Sri Lanka.
Sri Lanka’s GDP was estimated by the government to be $89 billion last year. Even after accounting for currency depreciation and the anticipated 8.7% fall in GDP this year, the economy will still be about $75 billion, with a per-capita income of about $3,400. The World Bank defines low-income countries as those having a per-capita income of $1,085 or less in 2021.
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