By INDIKA SAKALASOORIYA IN WASHINGTON
ECONOMYNEXT –The International Monetary Fund in talks with Sri Lanka’s new administration on its priorities and is working towards the next review to continue its Extended Fund Facility program with the island.
A Sri Lankan delegation, led by the Central Bank Governor, the Finance Ministry Secretary, and the President’s Advisor on economic matters, Duminda Hulangamuwa, is currently engaged in these talks.
“Under the programme we have elements which address some of the priorities of the new government including social protection and so on,” Krishna Srinivasan, Director of the IMF’s Asia Pacific Department said in Washington.
“But the details of the programme are continuing and they’ll be happening this week in Washington.
“And we are encouraged by what we’ve heard so far and hope that we can move fast toward the third review which should start soon.”
The third review of the 48-month bailout package, originally scheduled for September on June economic data, was postponed due to Sri Lanka’s presidential election, which saw Anura Dissanayake elected as the country’s new president.
Srinivasan, who led a high-level IMF delegation to Colombo following the election of the new president, said there was consensus with Sri Lanka authorities to safeguard and build on the hard-won gains achieved under the existing programme.
With the IMF’s help, Sri Lanka has reached an agreement with the country’s official creditors, and an in-principle agreement with the private creditors.
The next step for the country would be to reach a formal agreement with all the creditors.
“That’s a big step forward,” Srinivasan said. “Of course that’s not the end. There is a lot more work to be done with regards to the continuity of reforms. There is a long way to go before you are on a path of strong and sustainable recovery,”
Sri Lanka has made significant progress from the depths of the crisis it faced in 2022, achieving positive growth over the last four quarters. However, the recovery has been uneven, particularly impacting the poor and vulnerable groups, who continue to bear the brunt of economic challenges.
