The International Monetary Fund (IMF) announced that the timing of Sri Lanka’s Third Review under the Extended Fund Facility (EFF) will be determined in consultation with the government following the upcoming presidential election. The IMF will proceed with program discussions once the election results are finalized.
During the IMF’s weekly press briefing, Julie Kozack, Director of the Communications Department, highlighted that the IMF Executive Board completed the 2024 Article IV Consultation and the Second Review of the EFF program on June 12, 2024, providing Sri Lanka access to approximately $336 million. “Program performance remains strong. Reform efforts are bearing fruit. Economic growth is starting to revive. Inflation is coming down. International reserves are increasing, and revenue mobilization is improving,” Kozack noted.
However, she emphasized that significant vulnerabilities persist, and maintaining reform momentum is crucial.
Addressing questions about Sri Lanka’s presidential election, scheduled for September 21, Kozack stated, “It is really for the people of Sri Lanka to decide.” She stressed the importance of achieving the program’s objectives to help Sri Lanka emerge from one of its worst economic crises. “A lot of progress has been made, but the country is not out of the woods yet, and it is important to safeguard those hard-won gains,” she added.
Regarding debt restructuring, Kozack clarified that the IMF does not participate in negotiations between member countries and their creditors but provides an overall assessment of debt sustainability.
When asked about opposition claims that the Debt Sustainability Assessment (DSA) related to the EFF program could be revisited post-election, Kozack reiterated, “This is for the people of Sri Lanka to decide.” She underscored that while the program has achieved significant milestones, preserving these gains is essential for the country’s recovery.
Kozack concluded by noting that discussions on the timing of the Third Review of Sri Lanka’s EFF program will resume with the new government after the presidential elections, stating, “We will be ready to move forward once the elections have taken place and a new government is in place based on the choice of the people.”
