Sri Lanka's IMF-Backed Economic Reform: Milestones and Future Outlook

The IMF's bailout programme to aid Sri Lanka's economic reform has shown promising results. Following the nation's first-ever sovereign default in April 2022, the IMF's conditions and assistance have led to significant economic improvements, including GDP growth, inflation control, and increased reserves. Continued reform and policy implementation are essential for sustained recovery.

Sri Lanka's economic reform programme under the IMF bailout has delivered promising results, according to the global crisis lender. The IMF, concluding its latest mission in the financially strained island nation, lauded the government's efforts in economic and financial policy.

The Washington-headquartered IMF has been involved since Sri Lanka's first-ever sovereign default in April 2022. The global entity mandated external debt restructuring as part of the terms for a USD 2.9 billion bailout package, releasing its third tranche in June.

IMF mission chief Peter Breuer noted the commendable progress, highlighting a 5.3% GDP growth in early 2024 and controlled inflation below the CBSL's 5% target. He emphasized the need for continued improvement to elevate living conditions in Sri Lanka. Future efforts will focus on revenue generation and prudent fiscal management following recent key legislation, aiming for debt sustainability and investor confidence.

(With inputs from agencies.)