IMF Praises Sri Lanka’s Economic Reforms Amid Bailout Review

IMF Praises Sri Lanka’s Economic Reforms Amid Bailout Review

The IMF praised Sri Lanka for its significant progress in macroeconomic policy reforms ahead of the upcoming review of the lender’s $2.9 billion bailout programme for the crisis-hit country. According to the IMF, Sri Lanka is anticipated to shortly complete deals with external commercial borrowers.

The head of the IMF’s communication department, Julie Kozack, emphasised Sri Lanka’s “sufficiently strong progress” towards debt restructuring. During a press conference, Kozack stated, “We do see macroeconomic policy reform beginning to bear fruit.”

Promising results include strong reserve accumulation, quick disinflation, and early indications of economic expansion while maintaining the integrity of the financial system. Colombo will proceed with debt restructuring by finalising agreements in principle with government creditors and negotiating with external commercial creditors.

Before the second bailout programme assessment, Sri Lanka’s programme performance remained good, satisfying the majority of quantitative and structural requirements, but with minor delays. On June 12, the $2.9 billion bailout package will undergo a second review by the IMF’s Extended Fund Facility.

The top executive reported that while specific discussions are still ongoing with external creditors, such as the Export-Import Bank of China, most domestic debt operations have been completed. “We feel that there has been sufficiently strong progress on the debt restructuring front,” declared Kozack.