COLOMBO: Sri Lanka aims to revise its current “unrealistic” budget and is in negotiations with the World Bank to increase its assistance from $300 million to $700 million, according to the country’s finance minister on Wednesday.

The island country is dangerously short of foreign exchange, having been struck hard by COVID-19 and short of income following President Gotabaya Rajapaksa’s significant tax cuts. It has requested an emergency rescue from the International Monetary Fund.

Inflationary pressures and shortages of imported food, gasoline, and medications have sparked weeks of unrest, which have occasionally devolved into violence.

At a parliament session, Finance Minister Ali Sabry said, “The existing budget is unrealistic, given our challenges.”

“We will bring in a new budget that will seek to address core issues of low public revenue.”

Sabry stated that he hoped to raise tax collection as a proportion of GDP to 14 percent within the next two years, up from 8.7 percent currently.

Sri Lanka would hire financial and legal consultants for a planned restructuring of its national debt within the next two weeks, Sabry said, adding that the government was eager to collaborate with the IMF on structural changes.

He said that “this is the only way to put the economy on a sustainable footing.”

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