GNV News　2025年9月21日

As of 2025, Sri Lanka is pursuing austerity measures such as reducing public spending and increasing indirect taxes. These policies were conditions imposed in order to receive financial support from the International Monetary Fund (IMF) from 2023年3月, after the country fell into a fiscal crisis in 2022 due to heavy debt and a shortage of foreign exchange reserves. A report on Sri Lanka’s public finances released by the World Bank on 2025年9月9日 revealed that, compared with similar policies implemented in various countries between 1980 and 2024, Sri Lanka’s austerity program is being implemented the most rapidly. However, such policies hinder investment and economic growth and make people’s lives more difficult.

To obtain support from the IMF, the Sri Lankan government is implementing measures such as currency devaluation, interest rate hikes, tax increases, and cuts to subsidies and public spending. As a result of these policies, many people’s real wages have fallen and living conditions are being squeezed. For example, cuts to public spending have dealt a blow to already fragile infrastructure, further stalling the economy. Since the fiscal crisis of 2022, wage levels have fallen in both the public sector and private companies, and, together with tax increases and rising energy prices, the number of people falling into poverty is believed to be increasing.

Seeking improvement from this situation, the 2024 presidential election was won by Anura Kumara Dissanayake, who pledged, among other things, to renegotiate the IMF loan conditions. However, under the agreement the Sri Lankan government had previously concluded with the IMF, the current administration has been forced to act under strict constraints. The situation of being pressed by debt repayments and deprived of policy autonomy is common among low- and middle-income countries known as the “Global South.” According to a report by the United Nations Conference on Trade and Development (UNCTAD) report, about half of the world’s population lives in countries that spend more on interest payments than on health and education. Across Global South countries, there are growing calls to change the creditor-dominated approach to debt.

Learn more about the World Bank and the IMF→「The World Bank and the International Monetary Fund: Perpetuating Poverty?」

Learn more about the exploitation of low- and middle-income countries by high-income countries→「A major hidden factor preventing escape from poverty: Illicit financial flows」

A Sri Lankan port expanded with financing from the Asian Development Bank (Photo: Asian Development Bank / Flickr [CC BY-NC-ND 2.0])