IMF remains very hopeful on Sri Lanka

By Easwaran Rutnam

The International Monetary Fund (IMF) remains hopeful on Sri Lanka, which has been severely affected by an economic crisis.

IMF Managing Director, Kristalina Georgieva briefly noted the issue in Sri Lanka during a discussion with Centre for Global Development President, Masood Ahmed.

“So, on Sri Lanka, there are three large creditors, Japan, India, China. We are very hopeful to see an engagement from the public side that comes quickly. And then, of course, looking at all the parameters, bringing the private sector on board,” Georgieva said.

An IMF mission led by Peter Breuer and Masahiro Nozaki visited Colombo from August 24 to September 1, 2022 to continue discussions on IMF support for Sri Lanka and the authorities’ comprehensive economic reform program.

The IMF staff and the Sri Lankan authorities later reached a staff-level agreement to support Sri Lanka’s economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about US$2.9 billion.

The objectives of Sri Lanka’s new Fund-supported program are to restore macroeconomic stability and debt sustainability, while safeguarding financial stability, protecting the vulnerable, and stepping up structural reforms to address corruption vulnerabilities and unlock Sri Lanka’s growth potential.

Debt relief from Sri Lanka’s creditors and additional financing from multilateral partners will be required to help ensure debt sustainability and close financing gaps. (Colombo Gazette)