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COLOMBO (AFP) – An International Monetary Fund (IMF) bailout package for crisis-hit Sri Lanka could take up to three months to arrive, the country’s central bank chief said on Friday, as anti-government protests over the economic crisis continue to escalate.

The island nation of 22 million people has been rocked by months of acute food, fuel and medicine shortages, prompting widespread protests calling for President Gotabaya Rajapaksa to resign.

Central bank chief Nanadalal Weerasinghe said he was hopeful of a staff-level agreement with the IMF within two months, but a final deal would take another three weeks.

The key objective is to achieve debt sustainability before an IMF programme,” Weerasinghe said, adding that experts will be named shortly to renegotiate Sri Lanka’s external debt estimated at USD51 billion. Two weeks ago, Sri Lanka announced it was defaulting on its foreign debt after running out of foreign exchange to import even the most essential supplies.

Weerasinghe told reporters in Colombo that he expected about USD3 billion from an eventual IMF programme, but the country would first have to carry out painful reforms.

The current tax structure is not sustainable. We must go back at least to the level of taxation we had before 2019,” he said, referring to a series of tax breaks implemented by Rajapaksa in an election pledge that propelled him to power in November 2019, but devastated state revenue.

Official data released on Friday showed year-on-year inflation at 29.8 per cent in April, a seventh consecutive record-high.

Weerasinghe warned inflation could jump even more as fuel and food prices increased sharply with the local currency losing over 40 per cent of its value in a month.

The president announced on Tuesday that the World Bank had agreed to grant USD600 million to alleviate the economic crisis.

But the international lender on Friday denied finalising any fresh loans.