Lanka wants loans as poor nation, status as 'middle-income'

Sri Lanka will remain a middle-income country but request the World Bank to grant it some loans generally offered to poorer nations, the president's office said on Tuesday, clarifying a cabinet spokesperson's earlier comments on the matter, report agencies.
The island nation of 22 million is facing its worst economic crisis in more than seven decades and the spokesperson said earlier in the day that the government would seek to change its economic status to "low income country" for easier funding.
President Ranil Wickremesinghe's office, however, said the status change would not happen.
"Sri Lanka will remain a middle-income country," the office said in a statement. "We will request the World Bank to grant the country eligibility to obtain loans offered by the International Development Association (IDA)."
The IDA is an arm of the World Bank that helps the world's poorest countries.
The local World Bank office in Colombo had no immediate comment on the Sri Lankan request.
It said it would continue its discussions with Sri Lanka and that the "key priority" was to move ahead with debt restructuring and economic reforms to put the country's growth back on track.
Earlier report said Crisis-hit Sri Lanka will seek a downgrade of its credit status to try to access concessionary loans usually available only for the world's poorest nations, the government said Tuesday.
With GDP per capita of $3,814 last year, Sri Lanka was considered a relatively prosperous nation of 22 million people until the government ran out of foreign exchange.
Despite suffering its worst-ever financial crisis, it is still considered a "lower middle income country".
That makes it ineligible for concessionary loans from the World Bank's International Development Association (IDA), which helps countries classed as "low income" -- a status Sri Lanka moved up from in 1997.