IMF Chief Kristalina Georgieva commended Sri Lanka’s economic recovery during a meeting with President Dissanayake, praising its significant turnaround since the crisis. She reiterated the IMF’s commitment to provide further support as the nation implements reforms to attract investment and manage debt. Following a US$2.9 billion bailout, Sri Lanka has regained 40% of its economic output lost since 2018, reflecting a positive impact from the reforms.
Kristalina Georgieva, the Chief of the International Monetary Fund (IMF), expressed her commitment to support Sri Lanka’s economic recovery during a recent virtual meeting with President Anura Kumara Dissanayake. She highlighted the nation’s commendable turnaround from a crisis, asserting that the economy has stabilized and is performing positively. This development is particularly beneficial for the poor population that suffered during the economic turmoil.
Sri Lanka received a significant financial boost with a US$2.9 billion IMF bailout in 2023 after experiencing its first sovereign default in April 2022, largely due to a foreign exchange crisis. Despite entering office vowing to renegotiate the IMF loan, Dissanayake has continued the austerity measures initiated by his predecessor, aimed at stabilizing the economy.
Georgieva emphasized the necessity of domestic actions to enhance the economy amidst global uncertainties, stating, “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.” She affirmed IMF’s readiness to fully support Sri Lanka’s successful trajectory toward economic recovery.
President Dissanayake expressed his intention to lower Sri Lanka’s debt and stimulate private investment, signaling upcoming legislative measures for an Investor Protection Act to create a secure investment climate. Last month, the IMF disbursed US$334 million as the fourth tranche of its four-year bailout, asserting that ongoing reforms have shown considerable positive outcomes with Sri Lanka’s real GDP recovering 40 percent of the losses from 2018 to 2023.
The discussions between IMF Chief Kristalina Georgieva and Sri Lanka’s President Anura Kumara Dissanayake underscore a crucial moment in the nation’s efforts to stabilize and recover economically. The commitment of the IMF to support further reforms indicates a positive trajectory following the recent bailout, while Dissanayake’s strategy to attract investments and manage debt signals a proactive approach in navigating future challenges. The remarkable recovery of Sri Lanka’s economy showcases the potential for further improvement with ongoing support and correct policy measures.
Original Source: www.channelnewsasia.com
