The World Bank has declared that it does not plan to offer new financing to Sri Lanka, which is battling its worst economic crisis in decades, until the country has an adequate macroeconomic policy framework in place. In a statement, the World Bank said Sri Lanka needed to adopt structural reforms to tackle the root causes of its crisis. The bank has starved it of foreign exchange and led to shortages of food, fuel, and medicines. The bank is considering existing loans to help alleviate shortages of essential items such as medicine, cooking gas, fertiliser, meals for children, and cash for vulnerable households. Based only on the above information, which one of the following statements can be inferred with certainty? A. According to the World Bank, the root cause of Sri Lanka's crisis is that it does not have enough foreign exchange. B. The World Bank has stated that it will advise the Sri Lankan government on how to tackle the root causes of its economic crisis. C. According to the World Bank, Sri Lanka does not yet have an adequate macroeconomic policy framework. D. The World Bank will provide Sri Lanka with additional funds for essentials such as food, fuel, and medicines.

GATE 2023 · General Aptitude · Passage Reading · medium

Answer: C. According to the World Bank, Sri Lanka does not yet have an adequate macroeconomic policy framework.

1. Evaluate option A: Option A says the Bank identified lack of foreign exchange as the ROOT CAUSE. The passage only says the crisis led to a shortage of foreign exchange (an effect), and the Bank called for structural reforms — it never named foreign exchange as the root cause. A is not supported.
2. Evaluate option B: Option B says the Bank stated it will ADVISE the government. The passage only says the Bank said Sri Lanka needed to adopt reforms. Saying a country 'needs to' do something is not the same as saying 'we will advise them on how'. B goes beyond the passage.
3. Evaluate option C: The passage says the Bank will not finance until the country has an adequate macroeconomic policy framework. This conditional ('until X happens') directly implies the Bank believes X has not yet happened — i.e., Sri Lanka does not currently have an adequate framework. C follows necessarily.
4. Evaluate option D: Option D says the Bank WILL provide additional funds for essentials. The passage says the Bank is considering using its EXISTING loans to help alleviate shortages — it has explicitly declared it will NOT offer NEW financing. D directly contradicts the passage.