Sri Lanka to cut spending, create more jobs after rate cut -president

COLOMBO (Reuters) - Sri Lanka will work to cut government spending, boost foreign investment and create jobs, President Ranil Wickremesinghe said on Thursday hours after the central bank cut interest rates for the first time in three years.

The South Asian island republic plunged into crisis last year as its foreign exchange reserves ran out, food and energy prices spiralled and protesters forced the ouster of the country's president.

A new government, headed by Wickremesinghe, took the reins in July, and negotiated a $2.9 billion bailout from the International Monetary Fund (IMF) in March.

Inflation, which hit a record high of around 70% in September, is coming down, government revenues are looking up and dollar inflows from remittances and exports have improved, the president said in an address to the nation.

"The country's economy is gradually recovering from the crisis, thanks to correct policies including the collective efforts of the people."

Wickremsinghe outlined multiple reform measures including increasing exports, attracting international investors and restructuring loss making state enterprises to put public finances in order and return to country to growth.

(Reporting by Uditha Jayasinghe, writing by Tanvi Mehta, editing by Mark Heinrich and Ros Russell)

By Uditha Jayasinghe