Sri Lanka is set to hold extensive discussions with the International Monetary Fund (IMF) regarding the framework of a $2.9 billion bailout program during the lender’s upcoming annual meetings in Washington later this month, according to a statement from the country’s cabinet spokesperson on Tuesday.
Leading the delegation to these meetings will be Sri Lanka’s central bank governor, treasury secretary, and financial advisers to the newly elected president, Anura Kumara Dissanayake. Minister Vijitha Herath made this announcement during a press conference.
IMF to Review Economic Developments
Minister Dissanayake indicated that Sri Lanka would engage with the IMF immediately for the third review of its bailout program. Approval of this review is essential for the disbursement of the fourth tranche, estimated at approximately $337 million. An IMF team is scheduled to visit Colombo for three days starting Wednesday to meet with Dissanayake and his team to discuss recent economic developments and reforms under Sri Lanka’s IMF-supported economic program, as confirmed by an IMF spokesperson.
“We believe an evaluation of the IMF program is necessary, but this will not occur during the delegation’s visit this week,” Herath stated, adding that the IMF delegation is making a “courtesy call” during their trip.
The 2024 annual meetings of the IMF and the World Bank will take place from October 21 to 26.
Concerns Among Investors
In the recent presidential election held in September, millions of Sri Lankans placed their trust in the leftist leader Dissanayake, marking the first election since the nation’s economy faltered in 2022. Voters were drawn to his promises of combating corruption and strengthening a fragile economic recovery.
However, investors express concerns that Dissanayake’s intention to renegotiate the terms of the IMF bailout could lead to delays in future disbursements. Despite these worries, the new president reassured the public last week that the program would proceed under his administration.
