Krishna Srinivasan, International Monetary Fund director for Asia and the Pacific, said the projected economic growth of 1.5% next year depends critically on the economic reform program that Sri Lanka has agreed to implement, including including difficult reforms in five specific areas.
“It is now essential to continue the momentum of reform under a strong monarchy by the Sri Lankan authorities and people, on a larger scale,” he said.
An unprecedented economic crisis in Sri Lanka of 22 million people has caused severe shortages of food, fuel and medicine, as well as power outages and runaway inflation, leading to angry protests that have forced the President of the time, Gotabaya Rajapaksa, to flee the country and resign.
Sri Lanka also nearly depleted its foreign currency holdings last year and the island nation announced it would suspend foreign loan repayments.
The International Monetary Fund approved a $3 billion bailout package in March that will last four years. The authorities are currently discussing debt restructuring with foreign creditors.
An IMF team led by Peter Brewer is currently visiting Sri Lanka for discussions with officials ahead of the program’s first review later this year.
In April 2022, Sri Lanka defaulted on its external debt, estimated at $46 billion.
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