 |
|
The International Monetary Fund (IMF) has expressed its willingness to work with the new government of Sri Lanka, led by President Anura Kumara Dissanayake, as the country navigates its economic recovery. Following the recent presidential election, the IMF is set to discuss the timing of the next review of Sri Lanka's loan program, which was initiated under the former president, Ranil Wickremesinghe. The IMF's statement highlights the importance of building upon the progress achieved in stabilizing Sri Lanka's economy, which had been grappling with one of its most severe economic crises in recent years.
The IMF's involvement in Sri Lanka's economic recovery stemmed from the country's unprecedented economic crisis in 2022, which manifested in severe shortages of essential goods such as fuel and food. The IMF had approved a four-year loan facility totaling USD 2.9 billion, subject to strict economic reforms, to help Sri Lanka overcome this crisis. The new government, formed on Monday, has expressed their eagerness to engage with the IMF this week.
The disbursement of the third tranche of the loan facility, amounting to USD 360 million, was expected after the completion of the third review of the IMF-supported program. However, with the presidential election looming, the IMF placed the review on hold. Now, under the new administration, the IMF will be reviewing the timing of the third review of the IMF-supported program. The new government faces the critical task of reaching a new staff-level agreement on the next phase of the IMF program, while ensuring that the budget aligns with the IMF's targets. This requires close collaboration with the IMF and navigating the IMF's stringent conditions while addressing the concerns of the Sri Lankan population.