Sri Lanka Increased power prices by 66% hoping to gain IMF support
Sri Lanka raised power prices by 66 percent on Thursday, in a move the government hopes will persuade the International Monetary Fund (IMF) to provide a bailout for its crisis stricken economy.
The increase, announced by Power and Energy Minister Kanchana Wijesekera, comes after the government raised electricity prices by 75 percent previous year, and adds to the pain of Sri Lankans already struggling with inflation above 54% year-on-year in January and income taxes as high as 36 percent.
'We know that this will be hard on the public, especially the poor, but Sri Lanka is caught in a financial crisis and we have no choice but to move towards cost reflective pricing,' Energy Minister told media.
We hope that with this step Sri Lanka has moved closer to getting the IMF programme. he added.
The International Monetary Fund agreed to loan Sri Lanka 2.9 billion US dollar in September to overcome its worst financial crisis in seven decades, but the deal comes with conditions that include raising taxes, removing subsidies and cutting public sector debt.
Analysts forecast the power price hike to further increase inflation. Inflation hit a record 73.7 percent in September 2022.
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