Sri Lanka's macroeconomic policy reforms are beginning to yield positive results, with the country poised to finalize agreements with external commercial creditors soon, according to the International Monetary Fund (IMF).
The IMF made this assertion ahead of the second review of Sri Lanka's USD 2.9 billion bailout programme.
Speaking at a press conference on Friday, Julie Kozack, Director of the IMF Communication Department, emphasized that Sri Lanka has made significant progress in debt restructuring.
Kozack noted that the country's performance under the bailout program has been robust, with most quantitative and structural conditions for the second review either met or implemented with some delay. However, she highlighted that reforms are still ongoing in certain areas.
The second review of the IMF's Extended Fund Facility, part of the USD 2.9 billion bailout package for Sri Lanka, is scheduled for June 12.
Kozack confirmed that the IMF's Executive Board will convene to discuss the second review and the Article IV Consultation, a process where the IMF holds bilateral discussions with its member countries to assess economic developments and policies.
"In Sri Lanka, we are witnessing the beginning of positive outcomes from macroeconomic policy reforms," Kozack stated, citing rapid disinflation, robust reserve accumulation, and initial indications of economic growth while maintaining financial system stability as commendable achievements.
She further elaborated that Sri Lanka's next steps in debt restructuring involve finalizing negotiations with external commercial creditors and implementing agreements reached with official creditors.
Kozack mentioned that discussions with external official creditors, including an MOU with the official creditor committee and final agreements with the Export-Import Bank of China, are underway. Talks with the China Development Bank are also progressing.
"We anticipate that agreements with external commercial creditors, in line with program parameters, will be concluded soon. Overall, we assess that there has been significant progress in debt restructuring," she affirmed.
In March, the IMF announced a staff-level agreement with Sri Lanka for the next phase of the bailout program, enabling access to USD 337 million from the total package approved in 2023. Two tranches of USD 330 million each were disbursed in March and December 2023.
Sri Lanka declared its first-ever sovereign default in April 2022, marking a significant event since gaining independence from Britain in 1948.
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