IMF ensures continuation of support for Sri Lanka’s reforms
Sri Lanka’s forthcoming Presidential election and resulting political uncertainty could complicate the continuation of the International Monetary Fund (IMF) bailout programme, Finance Ministry sources warned.
Two key opposition parties SJB and NPP have pledged to amend conditions set by the IMF. An IMF staff team concluded its visit to Sri Lanka this week, noted that the progress in meeting key commitments under the IMF-supported program will be assessed during the third review of the Extended Fund Facility (EFF).
The timing of this review will be discussed with the government post-election, according to IMF Senior Mission Chief Peter Breuer.
He emphasised that the successful completion of the third review is crucial for the timely disbursement of the fourth tranche of the EFF.
He noted that the IMF encourages a swift resolution of remaining steps to achieve debt sustainability and regain investor confidence, assuring continued support for Sri Lanka’s debt restructuring efforts.
The economic reforms undertaken by Sri Lankan authorities have supported recovery, evidenced by three consecutive quarters of real GDP growth, low inflation, increased revenue collection, and a buildup of external reserves.
Decisive progress on the reform agenda is essential to ensure a broad-based and stable economic recovery benefiting all Sri Lankans.
Discussions between the IMF team and Sri Lankan fiscal and monetary authorities focused on further measures needed for this year’s economic program commitments and the progress of the debt restructuring process, according to finance ministry sources. The IMF team met the President, Ministers and other officials where the President reaffirmed his dedication to guiding the country towards prosperity, officials said.
A senior official from the ministry remarked that political uncertainty wouldn’t affect the IMF’s approach, as it is committed to continuing the economic reform programme.
He emphasised that Sri Lanka’s economy cannot afford political disruptions regarding the third review and the disbursement of the fourth tranche.
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