September 16, Colombo (LNW): The International Monetary Fund (IMF) has commended Sri Lanka’s efforts in its economic recovery while cautioning that the nation remains in a fragile state.
In a recent press briefing on 12th September, Julie Kozack, Director of the IMF Communications Department, stressed the need for continued vigilance and reform, especially in light of the impending Presidential Election.
Kozack highlighted the importance of sustained reforms to ensure the country emerges fully from one of its most severe economic crises in recent history.
She emphasised that while the election outcome lies in the hands of the Sri Lankan people, maintaining the progress achieved under the IMF programme is vital.
“The country is not out of the woods yet,” Kozack stated, urging for the protection of the gains made so far.
Under the IMF’s Extended Fund Facility (EFF) programme, Sri Lanka has reached significant milestones. In June, the IMF Executive Board completed the 2024 Article IV Consultation and the second review of the EFF, leading to the release of approximately USD 336 million in financial support.
These developments have contributed to a gradual recovery in economic growth, a reduction in inflation, improved revenue collection, and a steady increase in international reserves.
Despite these positive signs, Kozack underscored that Sri Lanka remains susceptible to considerable economic risks, making it crucial to maintain reform momentum.
On the topic of debt restructuring, she noted key achievements, including the execution of domestic debt restructuring and agreements with the official creditor committee and the Export-Import Bank of China.
However, Kozack clarified that the IMF does not participate directly in negotiations between Sri Lanka and its creditors, instead offering an overall assessment of debt sustainability.
Kozack also mentioned that the continuation of the IMF programme hinges on the political landscape post-election. The timing of the programme’s third review will depend on the formation of the new government.
“Programme discussions will resume after the elections, once a new government is in place,” she remarked.
