The International Monetary Fund (IMF) has expressed strong confidence in Sri Lanka’s economic reform progress and anticipates that agreements with external commercial creditors, consistent with program parameters, will be reached soon.
News 1st has reported that Julie Kozack, Director of the Communication Department of the IMF, conveyed this in response to a question raised by journalist Zulfick Farzan.
The news report further states:
Julie Kozack, the Director of the IMF’s Communications Department, told a briefing that on June 12th, the Executive Board will meet to discuss the 2nd review and the Article IV consultation on Sri Lanka.
She said that Sri Lanka’s macroeconomic policy reforms are showing promising results. Notable achievements include rapid disinflation, robust reserve accumulation, and encouraging signs of economic growth—all while maintaining financial stability.
The program’s overall performance remains strong, with most quantitative and structural conditions for the second phase met, albeit sometimes with minor delays. Ongoing reforms continue to address critical areas.
“Program performance is strong, with most quantitative and structural conditionality for the second review met, or implemented with delay, and reforms are still on going in some areas,” she said.
The next crucial steps involve debt restructuring.
“The next steps on the debt restructuring, are indeed to conclude negotiations with external commercial creditors and to implement agreements in-principle with the official creditors. The Domestic Debt Operations are largely completed. Debt restructuring discussions are continuing. Most specifically, the authorities have been holding extensive discussions with external official creditors regarding an MOU, with the Official Creditor Committee, and the Final Agreements with the Export Import Bank of China,” she added.
Additionally, negotiations with the China Development Bank are at an advanced stage.
The IMF expects that agreements with external commercial creditors, aligned with program parameters, will be finalized soon.
” There is a strong expectation that agreements with external commercial creditors consistent with program parameters will be reached soon. Overall, we assess that there has been sufficiently strong progress, on the debt restructuring front,” she noted.
