The political crisis that led to the collapse of Sri Lanka's economy continues to add to the suffering when President Ranil Wickremesinghe is now trying to win the support of the International Monetary Fund (IMF) in obtaining aid funds.
It is said that Wickremesinghe will cut defense spending and other items in his first budget to strengthen the financial position to persuade the IMF to continue disbursing aid funds.
As a context, the Covid-19 situation has affected Sri Lanka's tourism-dependent economy and reduced remittances from workers abroad.
The matter indirectly led to an increase in oil prices, populist tax cuts and a 7-month ban on the import of chemical fertilizers has destroyed agriculture.
The issue escalated until the people of Sri Lanka overthrew the government and forced President Gotabaya Rajapaksa to flee, then replaced by Wickremesinghe with billions of dollars in debt.
Back to the original topic, Wickremesinghe who holds the finance portfolio will present Sri Lanka's first budget since the takeover with the main task of re-supporting the economy.
According to sources, he will cut 'hundreds of billions' of rupees in defense spending to parliament to strengthen the country's balance sheet score as evidence of its ability to be collateral against the IMF later on.
It is said that the new President will outline measures to support low-income communities that have been severely affected by the crisis and is expected to announce new taxes to reduce the fiscal deficit.
Meanwhile, the IMF team met Sri Lankan officials last week and plans to hold a staff-level agreement to continue discussions on an emergency loan of about $3 billion.
