The International Monetary Fund (IMF) has indicated that it is prepared to resume discussions on its programme with Sri Lanka once the presidential election is completed and a new government is established.
Julie Kozack, Director of the IMF Communications Department, stated that while the programme has achieved significant milestones, it is crucial to maintain these gains to help Sri Lanka fully recover from its severe crisis. In response to questions about renegotiating or revisiting the debt sustainability assessment related to the Extended Fund Facility (EFF) programme, Kozack emphasized that decisions regarding the upcoming presidential election are for the people of Sri Lanka to make.
Kozack highlighted that the IMF views the programme as having made substantial progress, but safeguarding these achievements is essential for the country’s full recovery. She noted that discussions about the timing of the Third Review will take place with the new government following the election.
Regarding the potential impact of the September 21 presidential election on the existing USD 3 billion programme, Kozack stressed that achieving the programme’s objectives remains a top priority. She outlined the positive developments observed so far, including increased economic growth, declining inflation, rising international reserves, and improved revenue mobilization. However, she cautioned that significant vulnerabilities persist, and continued reform efforts are crucial.
On the topic of Sri Lanka’s debt restructuring, Kozack mentioned that an IMF team visited Colombo in August and issued a media release detailing their findings. The release noted that executing domestic debt restructuring and finalizing agreements with the official creditor committee and China EXIM Bank are key milestones. She clarified that while the IMF assesses the overall debt sustainability, it does not participate directly in debt restructuring negotiations, which are conducted between the member country and its creditors.
Source: IMF Communications Department
