Sri Lanka's economic reforms paying off, feels IMF

“Sri Lanka is now on the verge of finalising debt restructuring with both private and official creditors. The completion of domestic debt operations has set the stage for a faster-than-expected economic recovery following the crisis,” she said.

Kozack provided an overview of the situation, stating, “On March 21, the IMF staff and Sri Lankan authorities reached a staff-level agreement for the second review of the program and completed the Article IV mission. The Executive Board of the IMF will complete the review once two conditions are met. First, the authorities must implement the agreed prior actions. Second, the financing assurances review must be completed, confirming the contributions from multilateral partners. This review will also assess progress in debt restructuring.”

Discussing Sri Lanka’s economic performance, Kozack remarked, “Macroeconomic policies in Sri Lanka are beginning to yield positive results. Notable achievements include a rapid decline in inflation, strong reserve accumulation, and initial signs of economic growth, all while maintaining financial system stability. Overall, the program performance has been robust.”

Regarding debt restructuring, she noted, “The next steps involve concluding negotiations with external private creditors and implementing agreements in principle with official creditors. The domestic debt operations are mostly finished. Initial negotiations with external bondholders in mid-April did not result in an agreement, but discussions are ongoing to reach an agreement in principle. On the official creditor side, these agreements in principle still need to be finalised,” she underlined.

Kozack’s statements highlight Sri Lanka’s progress and the ongoing efforts to secure a stable economic future through diligent policy implementation and strategic debt restructuring.

Fibre2Fashion News Desk (DR)