IMF Chief Praises Sri Lanka’s Economic Recovery and Offers Continued Support
IMF Chief Kristalina Georgieva praised Sri Lanka’s economic recovery during a meeting with President Dissanayake, promising continued support. Sri Lanka secured a $2.9 billion bailout after its economic collapse in 2022. The IMF noted significant recovery in the country’s GDP and pledged to assist in enhancing investment and reducing debt.
The International Monetary Fund (IMF) Managing Director Kristalina Georgieva has expressed her support for Sri Lanka’s economic recovery, recognizing the country’s “remarkable turnaround” following a recent virtual meeting with President Anura Kumara Dissanayake. During this discussion, Georgieva indicated that the economy has stabilized and is performing commendably. She emphasized the importance of this stability for the citizens, particularly for those from poorer backgrounds.
Sri Lanka managed to secure a US$2.9 billion bailout from the IMF in 2023 after declaring its first sovereign default in April 2022, which was a result of an unprecedented foreign exchange crisis and subsequent economic collapse. Dissanayake, who assumed office in September and identifies as a leftist, initially pledged to renegotiate the IMF agreement but has continued implementing austerity measures initiated by his predecessor.
Georgieva noted, “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 reaffirmed the IMF’s commitment to provide complete support for Sri Lanka’s successful path forward.
In response, Dissanayake expressed his intentions to mitigate the country’s debt and enhance private investment. He plans to introduce legislation such as an Investor Protection Act to foster a secure and appealing investment environment in Sri Lanka. Recently, the IMF disbursed US$334 million, marking the fourth installment of the four-year bailout intended to aid their reform initiatives. An IMF report indicated that the reforms are yielding positive results, with Sri Lanka’s real GDP recovering approximately 40 percent of its losses from the period of 2018 to 2023.
The IMF’s commitment to supporting Sri Lanka highlights the country’s substantial economic recovery after a severe crisis. The effective collaboration between President Dissanayake and the IMF showcases a dedicated approach towards reducing debt and encouraging investment. As reforms continue to show positive results, Sri Lanka’s economic future appears to be stabilizing under careful management.
Original Source: www.channelnewsasia.com
