Soldiers stand at attention as the national flag is lowered as part of a daily ceremony at the Galle Face Green promenade in Colombo on May 17, 2020. (ISHARA S. KODIKARA / AFP)
COLOMBO – Sri Lanka's treasury is running out of funds as a serious economic crisis continues to affect the the South Asian island nation, the country's cabinet spokesman said on Tuesday.
Cabinet Spokesman Bandula Gunawardena told reporters that funds collected through taxes have seen a decline.
As a result, the treasury is running short of funds to make payments, said Gunawardena.
Gunawardena said the economic crisis that hit the country in 2022 has affected the income of the treasury.
Cabinet Spokesman Bandula Gunawardena said further steps to cut expenses will be taken to reduce the impact caused by the economic crisis
"The expected income by way of taxes during the first three months of 2023 is low. However, we need to pay public sector salaries. Payments are made by the treasury and not by our personal funds," he said.
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He noted the president has informed all the ministries to slash their budget allocations for 2023 by at least 5 percent.
Gunawardena said further steps to cut expenses will be taken to reduce the impact caused by the economic crisis.
The cabinet spokesman said the treasury gets funds from public taxes. The country used to print money and obtain loans, but now it is unable to do that as no one is giving loans and they cannot print money.
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Sri Lanka defaulted on its repayments of loans last year and is now seeking approval from the International Monetary Fund for a bailout package to help the country recover from the crisis.