IMF warns of vulnerabilities and uncertainties in Sri Lanka

The International Monetary Fund (IMF) warned there are important vulnerabilities and uncertainties in Sri Lanka.

Julie Kozack, Director of the IMF Communications Department, said that sustaining the reform momentum in Sri Lanka is critical.

“On June 12th, 2024, the IMF Executive Board completed the 2024 Article IV Consultation, and the Second Review under the EFF program was Sri Lanka, providing the country with immediate access to about $336 million to support its economic policies and reforms. Program performance is strong, and reform efforts are bearing fruit in terms of reviving economic growth, lowering inflation, boosting reserves and improving revenue mobilization. However, as we have said before, important vulnerabilities and uncertainties do remain, and this means that sustaining reform momentum is critical,” Kozack told reporters in Washington.

She noted that a high-level team led by the IMF Director of the Asia Pacific Department, Krishna Srinivasan, is currently visiting Colombo to meet with President Anura Kumara Dissanayake and his new economic team.

“The delegation is discussing with the authorities the latest economic developments and their economic reform objective. Dates for the Third Review under the EFF will be announced in due course and this delegation will communicate when their visit concludes. And we will have more information for you at that time,” she added.

On the question on the bondholders, Kozack recalled that on September 18th, Sri Lanka and the international bondholder representatives reached an agreement in principle subject to confirmation of comparability of treatment by Sri Lanka’s Official Creditor Committee, and this does represent some significant progress in Sri Lanka’s debt restructuring process. (Colombo Gazette)