Sri Lanka’s recovery from the worst economic crisis in its history could be upended by the fallout from the Middle East war and the El Nino climate phenomenon, the International Monetary Fund warns.
Sri Lanka has raised fuel prices by more than 50 per cent since the US went to war with Iran in February.
The government has said it will continue to subsidise fuel in October, despite earlier plans to return to cost-recovery pricing.
“Safeguarding macroeconomic stability in a shock-prone environment requires unwavering commitment to prudent policies and reforms to rebuild fiscal and external buffers,” the IMF has said.
The four-year IMF loan programme comes to an end in March, and authorities have yet to decide whether they want a fresh arrangement with the Washington-based institution.
