The IMF has confirmed that the timing of Sri Lanka’s Third Review under the Extended Fund Facility (EFF) will be determined following the country’s presidential election, scheduled for September 21.
According to Julie Kozack, Director of the IMF’s Communications Department, the organization will move forward with program discussions after the election results and subsequent engagement with the government.
During the IMF’s weekly press briefing, Kozack highlighted:
That the progress made under Sri Lanka’s EFF program. She noted that the IMF Executive Board had completed the 2024 Article IV Consultation and the Second Review of the EFF on June 12, 2024, unlocking access to approximately $336 million U.S. dollars.
“Program performance remains strong. Reform efforts are bearing fruit. Economic growth is starting to revive. Inflation is coming down. International reserves are increasing, and revenue mobilization is improving,” Kozack stated.
However, she cautioned that key vulnerabilities remain, emphasizing the need to sustain reform momentum to ensure long-term economic recovery.
Addressing questions
Rregarding the upcoming election, Kozack reiterated that the process is a matter for the Sri Lankan people to decide. She emphasized that maintaining progress on the EFF’s objectives is essential for Sri Lanka to fully recover from one of its worst economic crises in history. “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.
On the issue of debt restructuring, Kozack clarified that the IMF does not directly participate in negotiations between Sri Lanka and its creditors. The IMF’s role, she explained, is to assess the sustainability of the country’s debt.
Responding to claims from Sri Lanka’s opposition regarding a potential renegotiation of the debt sustainability assessment (DSA) after the presidential election, Kozack stressed that the IMF remains focused on the current program.
She reiterated the importance of preserving the achievements made under the EFF, while leaving the political outcome of the election to the people of Sri Lanka.
The timing of Sri Lanka’s Third Review under the EFF will be discussed with the government post-election. “We will be ready to proceed with program discussions after the elections and once the new government is in place, based on the people’s choice,” Kozack concluded.
Last modified: September 13, 2024
