Is Sri Lanka in a state of quagmire politically and financially?

AS a distant observer, it appears and sense the deterioration of the state in both politically and financially, affecting the day to day life of public.

- Eng. J.L. Jayawardena

Preamble

Public anger is growing daily, increased cost of living and the frauds reported in the media and social networks. However, the Government appears to be not overly concerned of what is being faced, but believing they are in control of State machinery,the fulfilling the election promises and on track to achieving a IMF objectives and targets — awaiting to qualify for the final tranche in November and wrapping it up.

IMF Extended Fund Facility (EFF)

To date Sri Lanka has consumed $ 2.4 billion out of the $ 3 billion (approx.) agreed upon. The program will officially end in November 2026 or instead will go soft landing with a revision and extension. Despite consuming 80% of the total. Has Sri Lanka now totally in good shape economically or worse? The Economic pundits say Sri Lanka is still crawling. The Ditwah cyclone and the ongoing middle east crisis, continuing over 100 days had been squarely attributed as the core reasons to quash and manage the public anger and the rising cost of living. Furthermore, to divert public attention of Government’s inability in addressing ongoing social issues, tactfully in the process of bringing past political figures to CID for questioning, remanding and apply Detention Orders etc.

Treasury and Sri Lank Central Bank

The objectives of the two institutions are not strictly complementing. The former provides fiscal stability and the latter manage primarily the inflations. These two functions hardly overlap in the strict sense; however, one could hardly see independence despite CBSL being an autonomous institution. The recent deterioration of Sri Lanka Rupee against USD, the CBSL arranged currency swaps with local banks. This shows a temporary relief and to overcome harsh criticism of opposites and some political leverage for the Government to dodge, however the move was effortless and downward trends being continued.