The International Monetary Fund (IMF) has lauded Sri Lanka’s macroeconomic policies, noting a rapid decline in inflation and steady economic growth.
During a press briefing held on Thursday, May 16, in Washington, D.C., IMF Communications Director Julie Kozack remarked, “Sri Lanka’s economic performance is showing positive results. Macroeconomic policies are yielding commendable outcomes, including a swift reduction in inflation, robust reserve accumulation, and early signs of economic growth, all while maintaining financial system stability. Overall program performance has been strong.”
Kozack announced that IMF staff and Sri Lankan authorities have reached a staff-level agreement on economic policies, concluding the second review of the four-year Extended Fund Facility (EFF)-supported program and the 2024 Article IV Consultation. Upon approval by IMF Management and the IMF Executive Board, Sri Lanka will gain access to approximately $337 million in financing.
She highlighted that the IMF Executive Board’s review completion depends on two factors: the implementation of agreed prior actions by the authorities and the completion of the financing assurances review. This review will confirm multilateral partners’ financing contributions and assess adequate progress in debt restructuring.
Furthermore, Kozack noted the importance of concluding negotiations with external private creditors and implementing agreements with Sri Lanka’s official creditors. “Domestic debt operations are largely completed. Initial debt restructuring negotiations with external bondholders ended in mid-April without an agreement, but discussions are ongoing to reach a consensus. Agreements in principle with official creditors also need to be finalized,” she added.
