Colombo, Oct 25 (PTI) The International Monetary Fund is in talks with Sri Lanka’s new administration on its priorities and working towards the next review to continue its Extended Fund Facility programme with the island.
A Sri Lankan delegation led by Central Bank Governor Nandalal Weerasinghe and comprising the finance ministry secretary as well as the President’s Advisor on Economy Duminda Hulangamuwa is currently engaged in talks with the IMF, Economy Next reported.
“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 continue and they’ll happen this week in Washington.
“And we are encouraged by what we’ve heard so far and hope 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, 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 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, he said.
“That’s a big step forward,” Srinivasan said. “Of course, that’s not the end. There is a lot more work to be done about 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 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 hardships.