The withdrawal of foreign investments in the country, the breakdown of official foreign reserves and the presence of uncertainty in foreign sectors could be the causes for the breakdown of the economy warns a staff team from the International Monetary Fund (IMF) that visited Sri Lanka from 21st February 21 to 7th March, 2017.
A statement made at the end of the visit states there would be a rise in inflation due to the impact of drought and the VAT increase.
It is an official warning to the government made after the analyses made before the next installment of the US$1.5 billion IMF loan is released.
The economists in the country had warned in 2012 that the country was moving towards a financial crisis. However, former Mahinda Rajapaksa regime or the present Ranil – Maithri ‘yahapalana’ government have selected to ignore such warnings and carry on a spendthrift administration. Now, it has been shown with data that the country would enter crisis zone before the end of next year.