IMF Chief Kristalina Georgieva praised Sri Lanka’s economic recovery and pledged ongoing support. The country has stabilized after securing a $2.9 billion bailout and is experiencing significant GDP recovery. President Dissanayake plans to enhance private investment while continuing necessary reforms, despite initial expectations of renegotiating loan terms. The IMF’s latest funding supports reform initiatives, reflecting confidence in Sri Lanka’s economic progress.
IMF Chief Kristalina Georgieva has expressed support for Sri Lanka’s economic recovery, highlighting the nation’s significant progress during virtual discussions with President Anura Kumara Dissanayake. Georgieva commended the country’s transition from near economic collapse, stating, “The economy has stabilised and is now performing well,” emphasizing the positive impact on the vulnerable populations. The IMF pledged further assistance, although specific amounts were not disclosed.
Sri Lanka had secured a $2.9 billion bailout from the IMF in 2023, following its first sovereign default in April 2022 amidst a severe foreign exchange crisis. President Dissanayake, known for his leftist stance, has continued his predecessor’s austerity measures, despite his initial promise to renegotiate the terms of the loan. The IMF managing director highlighted the importance of domestic action to strengthen the economy amidst global uncertainties.
Dissanayake expressed his commitment to reducing national debt and enhancing private investment through legislative measures, including the introduction of an Investor Protection Act. In supporting these reforms, Georgieva noted that the IMF is eager to assist in this successful journey, reinforcing the ongoing economic recovery.
Last month, the IMF released $334 million as part of the four-year bailout loan to facilitate reform initiatives. The IMF has recognized that the economic recovery is substantial, with Sri Lanka’s real GDP regaining approximately 40% of its pre-crisis losses from 2018 to 2023.
The discussions between the IMF and Sri Lanka’s leadership underscore the remarkable economic turnaround the country is experiencing following its financial crisis. The commitment from both the IMF and Sri Lankan authorities to continue implementing reforms suggests a positive trajectory towards economic stabilization and growth. Continued collaboration will be critical in navigating future challenges and ensuring sustainable development.
Original Source: www.channelnewsasia.com
