Colombo, Nov 2 (PTI) Even as debt-trapped Sri Lanka awaits the release of the second tranche of the IMF bailout package, President Ranil Wickremesinghe has said servicing external credit with interest to win the confidence of creditors will be the focus of the budget for 2024.

The budget is to be presented in Parliament by Wickremesinghe, who is also the Minister of Finance, on November 13.

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“We have to win the confidence of both bilateral and private external creditors,” Wickremesinghe said on Wednesday while addressing the event for Exports Awards 2023 and added that winning that confidence “would be a key to regaining economic recovery.”

“We will have to pay 2.5 billion rupees as loans and interest next year. So we have set aside a considerable proportion from the budget for repayment of loans,” Wickremesinghe said.

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Cash-strapped Sri Lanka has a total foreign debt of USD 46.9 billion, 52 per cent of which is owed to China, its largest lender. India had pitched in with about USD four billion in assistance to Sri Lanka to immediately tide over its worst economic crisis and helped the island nation to access the IMF bailout package.

Sri Lanka awaits the release of the second tranche of the four-year 2.9 billion dollar International Monetary Fund (IMF) bailout clinched mid-March.

On October 31, Wickremesinghe presided over the second high-level roundtable discussion on 'Crisis to Recovery' with the participation of representatives from the World Bank (WB), Asian Development Bank (ADB), IMF, and the Asian Infrastructure Investment Bank (AIIB).

At the award event, the President stated that the rupee has to be protected from depreciation while paying external credit and added, “We can't allow the rupee to fall. Now, the government is not allowed to print money.”

Sri Lanka had, in April 2022, announced its first-ever sovereign default with 46 billion dollars worth of external credit outstanding.

Currently, negotiating for external debt restructuring is underway.

He said achieving economic stability was a key to winning the confidence of external creditors and added, “For this, we have to raise our revenue. The VAT rate was very reluctantly increased last Monday.”

The VAT was hiked from 15 to 18 per cent effective January 2024.

He said difficult decisions had to be made for the sake of a better future.

“Last year, we suffered a minus 7 per cent growth, this year we have been able to raise it to plus 0.05 per cent.”

Wickremesinghe's government has faced public criticism for imposing high utility rates to minimize losses in the state service providers.

Political opposition has been blaming him for giving in too much to IMF dictates.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)