By Enyichukwu Enemanna
The International Monetary Fund (IMF) has promised to support Sri Lanka’s economic recovery, expressing satisfaction with the cash-strapped nation’s “remarkable turnaround” during a virtual meeting with it’s president.
IMF Managing Director, Kristalina Georgieva, assured support to the South Asian nation during the meeting with President Anura Kumara Dissanayake, his office said on Saturday.
“The economy has stabilised and is now performing well,” Georgieva said during her overnight meeting with Dissanayake, a video clip shared by the Sri Lankan presidency indicates.
“This is so important for people, especially for poor people. We see a remarkable turnaround from the days when it was near collapse,” she said.
Sri Lanka secured a $2.9 billion IMF bailout in 2023 after declaring its first sovereign default in April 2022, following an unprecedented foreign exchange shortage and an economic meltdown.
Dissanayake came to power in September last year with an assurance of renegotiating the IMF loan but has since continued with his predecessor’s austerity measures.
“Taking action domestically to strengthen the economy in this time of greater global uncertainty is even more important than it would be if we were in a sort of plain vanilla global economic situation,” said Georgieva.
She added that the IMF “would be very happy and eager to back you fully in what has been a successful journey”.
Dissanayake told her that he was keen to reduce the island’s debt and boost private investment.
“To achieve this, we will introduce suitable legislation, including an Investor Protection Act, and ensure a secure and favourable environment for all investors,” his office quoted him as saying.
Last month, the IMF released $334 million, the fourth instalment of the four-year bailout loan, to support the reform programme.
The IMF has said reforms are bearing fruit, and the economic recovery has been remarkable, with Sri Lanka’s real GDP recovering “40 percent of its loss incurred between 2018 and 2023.”
Sri Lanka experienced its worst post-independence economic crisis in 2022–23. The new government is struggling to balance economic growth with debt sustainability.
