IMF Chief hails Sri Lanka’s economic reforms as milestones mark recovery

Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), commended Sri Lanka’s progress in implementing its economic reform program.

Addressing members of the financial community, she highlighted significant milestones achieved under the IMF-supported program aimed at restoring the country’s economic stability.

Sri Lanka’s economic reforms are backed by a 48-month Extended Fund Facility arrangement of Special Drawing Rights (SDR) 2.286 billion (approximately USD 3 billion), approved by the IMF Executive Board on March 20, 2023.

Georgieva noted that the program is off to a strong start, with visible recovery in the economy, low inflation, and growing foreign reserves.

Key milestones include the IMF’s staff-level agreement for the third review of the program, reached on November 23, 2024, following the completion of two earlier reviews.

Georgieva also emphasized Sri Lanka’s agreement in June 2024 with the Official Creditors Committee and China EXIM Bank, which outlined debt treatments consistent with IMF parameters, further aiding efforts to restore debt sustainability.

Sri Lanka has recently made significant progress in negotiations with external and local creditors.

Agreements with the Steering Committee of the Ad Hoc Group of External Bondholders and the Local Consortium of Sri Lanka have been assessed by IMF staff as aligned with the program’s goals.

These agreements are expected to provide substantial debt service relief, contributing to long-term economic stability.

Georgieva stressed the importance of swiftly finalizing the debt operations with high creditor participation to ensure the program’s success. Additionally, Sri Lanka continues to work on completing other outstanding debt restructuring agreements.

“The Sri Lankan authorities have reaffirmed their determination to persevere with their reform agenda and put the economy on a path of sustained and high growth,” she stated, adding that continued support from international financial institutions, official creditors, and bondholders is crucial to the reform process.

The IMF remains committed to supporting Sri Lanka in achieving its economic and social reform goals, Georgieva assured, pledging ongoing assistance to help the country secure a sustainable recovery and future growth.