Sri Lanka Proposes Loan Payment Pause Until 2028 to Address Economic Crisis

President Ranil Wickremesinghe seeks a moratorium on loan repayments as part of a broader strategy to recover from bankruptcy and stabilize the nation's economy.

• Sri Lanka's President Ranil Wickremesinghe has proposed a pause on loan repayments until 2028, aiming to give the country time to recover from its severe economic crisis.
• The plan includes deferring payments for five years, with a gradual repayment schedule set from 2028 to 2042, following the country's declaration of bankruptcy in April 2022.
• Sri Lanka, grappling with an $83 billion debt, faced a severe foreign exchange crisis, leading to shortages of essentials and a significant economic downturn.
• The country is under a four-year IMF bailout program, having received two payments so far, with promises of debt forgiveness from major creditors like India, Japan, and China.
• Efforts to alleviate public anger include proposals to exempt school books, health equipment, and medicine from an 18 percent Value Added Tax.

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