IMF to move forward with Sri Lanka program discussions after presidential poll

The International Monetary Fund (IMF) says that the timing of Sri Lanka’s Third Review under the Extended Fund Facility will be discussed with the government following the elections and that they will move forward with program discussions after the country’s presidential election.

Responding to questions during the weekly press briefing, the Director of the IMF’s Communications Department, Julie Kozack stated that the IMF Executive Board completed the 2024 Article IV Consultation and the Second Review of the EFF program on June 12, 2024.  

She stated that this provided the country with access of about $336 million U.S. dollars. ”Program performance remains strong. Reform efforts are bearing fruit. Economic growth is starting to revive. Inflation is coming down. Reserves, international reserves are increasing, and revenue mobilization is improving.”  

Nonetheless, she stated that important vulnerabilities do remain, and that sustaining reform momentum is going to be essential.

In response to specific questions regarding the island nation’s presidential election, slated to be held on September 21, the spokesman said that it’s very important to note that for the upcoming elections, “it is really for the people of Sri Lanka to decide”.  

Kozack noted that achieving the program’s objectives is a key priority to give Sri Lanka a chance to emerge from one of its worst crises in history.  “As I’ve already noted, a lot of progress has been made, but the country is not out of the woods yet, and it is important to safeguard those hard won gains,” she said. 

Responding to a query with respect to debt restructuring, the spokesman said that the IMF does not take part in the negotiations. ”In the debt restructuring negotiations and discussions, those negotiations are between the member country and its creditors, with the IMF making an overall assessment of debt sustainability.”

Kozack was also asked about the statements by Sri Lanka’s opposition factions that the debt sustainability assessment (DSA), with regard to the EFF program, will be renegotiated or revisited after the presidential election.

“First, with respect to the upcoming presidential elections, this is for the people of Sri Lanka to decide.” 

“From the IMF’s position, what we see is a program that has made significant achievements, but that it is important to safeguard these achievements to enable the country to fully emerge from one of its worst crises,” she said.  

The IMF spokesman pointed out that the timing of the Third Review of Sri Lanka’s EFF program will be discussed with the government following the elections.  

“So, we will move forward with program discussions after the presidential elections take place and a new government, or the outcome based on the choice of the people, we will be ready to go with that,” she said.