Sri Lanka will remain a middle-income country, the President’s Media Division (PMD) said today, clarifying that the government is seeking a reverse graduation policy for a limited period of time.

The PMD’s remarks came after the Cabinet spokesperson announced earlier today that the Cabinet of Ministers granted the approval to downgrade Sri Lanka’s status from ‘middle-income country’ to ‘low-income country’.

The Cabinet of Ministers on Monday (Oct. 10) approved a proposal seeking to request the World Bank to grant Sri Lanka the eligibility to obtain loans offered by the International Development Association (IDA).

Accordingly, Sri Lanka’s status will be downgraded to ‘low-income country’, with the aim of obtaining concessionary funding assistance from IDA – an arm of World Bank that helps the poorest and the most vulnerable countries around the world.

This facility is called “Gap, the PMD added.

The Cabinet of Ministers approved the proposal as Sri Lanka no longer qualifies for International Bank for Reconstruction and Development (IBRD) loans due to a downgrade of the country’s credit rating, the PMD explained in its statement.

According to the PMD, a total of 12 countries including Indonesia have availed themselves of this facility when they were facing economic downturn similar to Sri Lanka. “The Government is pursuing a ‘reverse graduation’ policy for a limited period of time.”