The International Monetary Fund (IMF) has acknowledged that the current situation in Sri Lanka represents a combination of both an economic and humanitarian crisis, distinguishing it from previous challenges faced by the island nation. In an exclusive interview with News 1st on its Newsline program, Sarwat Jahan, the Resident Representative of the IMF in Sri Lanka, emphasized the gravity of the crisis and the need for concerted efforts to restore the country to its growth potential.
Jahan stated, “Sri Lanka has never faced debt sustainability issues before. This is the first time that Sri Lanka has announced a moratorium on its debt service. The situation is actually quite grave, and it is going to take quite a bit of effort from all stakeholders to bring Sri Lanka back to its growth potential.”
Earlier this year, the IMF approved a $3 billion bailout package for Sri Lanka, providing a pathway for the country to restructure its debt and facilitate economic recovery by 2024. This decision allows for the immediate disbursement of a $333 million loan over a span of four years.
Acknowledging the depth of the crisis, Jahan emphasized the importance of collective recognition and participation in the recovery process. He stressed the necessity for comprehensive reforms, including tax reforms, state-owned enterprise (SOE) reforms, and structural reforms aimed at strengthening institutions to prevent the recurrence of such a dire situation in the future.