The government stated that Sri Lanka will remain a middle-income country.

Sri Lanka no longer qualifies for International Bank for Reconstruction and Development (IBRD) loans due to a downgrade of the country’s credit rating.

Therefore, the Cabinet approved a proposal yesterday (10) to request the World Bank to grant the country eligibility to obtain loans offered by the International Development Association (IDA).

This is with the aim of obtaining concessionary funding from the International Development Association (IDA) – an arm of the World Bank that helps the world’s vulnerable countries. This facility is called “Gap”.

Twelve countries including Indonesia have availed themselves of this facility when they were facing an economic downturn similar to Sri Lanka. The Government is pursuing a “reverse graduation” policy for a limited period of time.

Earlier today (11), Cabinet Spokesman Bandula Gunawardena said that the Cabinet has granted approval to the proposal to downgrade Sri Lanka’s status from Middle Income Country to a Low Income Country to facilitate future loans following the information provided by world organizations.

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