Colombo seeks soft loans

SRI LANKA will remain a middle-income country but request the World Bank to grant it some loans generally offered to poorer nations, the president’s office said last Tuesday (11), clarifying a cabinet spokesperson’s earlier comments on the matter.

The island nation of 22 million is facing its worst economic crisis in more than seven decades and the spokesperson said earlier in the day that the government would seek to change its economic status to “low income country” for easier funding.

President Ranil Wickremesinghe’s office,

however, said the status change would not happen. “Sri Lanka will remain a middle-income country,” the office said. “We will request the World Bank to grant the country eligibility to obtain loans offered by the International Development Association (IDA).”

The IDA is an arm of the World Bank that helps the world’s poorest countries reduce poverty by providing zero to low-interest loans and grants.

The local World Bank office in Colombo had no immediate comment on the request. It said it would continue its discussions with Sri Lanka and that the “key priority” was to move ahead with debt restructuring and reforms .