Sri Lanka secures USD 2.9 billion IMF bailout for struggling economy: Report

The deal has been nearly a year in the making and is a lifeline for the country that has billions of dollars in loans, the report said.

In this file image, people place their canisters in line as they wait to buy kerosene oil outside a fuel station in Colombo, Sri Lanka, June 11, 2022 (Photo | AP)

Sri Lanka has secured a $2.9bn (£2.3bn) bailout from the International Monetary Fund (IMF) as it faces its worst economic crisis since independence, according to BBC.

The deal has been nearly a year in the making and is a lifeline for the country that has billions of dollars in loans, the BBC report said.

Foreign minister Ali Sabry told the BBC the government will raise funds by restructuring state-owned enterprises and privatising the national airline.

However, analysts warned Sri Lanka still faces a tough road ahead.

The country's economy has been hit hard by the pandemic, rising energy prices, populist tax cuts and inflation of more than 50%, the report added.

A shortage of medicines, fuel and other essentials also helped to push the cost of living to record highs, triggering nationwide protests which overthrew the ruling government in 2022.

As a result, the country defaulted on its debts with international lenders last May for the first time in its history.