'The country has come out of the situation of not being able to repay the debt', a big claim of Sri Lanka's Finance Ministry

On Saturday, Sri Lanka claimed that it has completed the process of coming out of debt default. This announcement was made when 'Fitch Ratings' increased Sri Lanka's credit rating from 'CCC' to 'CCC Plus'. This means that the island nation has improved its debt repayment situation and is no longer at risk of defaulting on its debt. A top official of the island nation's Finance Ministry Mahinda Siriwardana said that Sri Lanka on Friday officially announced its exit from debt default, which is a big step in their economic reform process.

Sri Lanka officially declared for the first time in 2022 its inability to repay the loan. Further, after this declaration, an economic crisis blew up in the country. There was a shortage of food, fuel, and gas; people started protesting on the streets. These protests made the then President Gotabaya Rajapaksa leave the country. Thereafter, Ranil Wickremesinghe took over as President and began negotiating to get help from the International Monetary Fund; in March 2023, Sri Lanka received a bailout package.

According to Siriwardana, it was an artificial crisis; the country's policies and wrong decisions caused it, and it could have been avoided if the IMF helped them at the right time. He also said that now the economic condition of the country is improving, but still people are suffering due to the crisis.

Sri Lanka had secured a $2.9 billion bailout package from the IMF. The IMF reviewed it recently for the third time, in which Sri Lanka was successful. Besides this, Sri Lanka inked a $14.2 billion debt restructuring pact, which was part of the requirement to fulfill the conditions put out by the IMF.