Sri Lanka's Economic Revival Strategy: Balancing Aid and Crisis

Sri Lanka anticipates an IMF staff-level agreement on its bailout review, crucial for a $337 million fund release. The new government, led by President Anura Kumara Dissanayake, is targeting comprehensive debt restructuring to stabilize the economy, which has faced severe contraction due to a foreign currency shortage.

Sri Lanka is on the brink of securing a crucial International Monetary Fund (IMF) staff-level agreement concerning the third review of its bailout program, as revealed by President Anura Kumara Dissanayake. This development, expected on Friday, potentially unlocks $337 million in funds following IMF executive board approval.

Recently, Dissanayake's National People's Power coalition triumphed in parliamentary elections, securing 159 out of 225 seats. An IMF delegation is currently in Colombo to assess a $2.9 billion program amid economic turmoil. The IMF announced that it would conclude its mission by November 23, though details remained undisclosed.

Sri Lanka is planning a $12.5 billion debt restructuring by engaging bilateral creditors such as Japan, China, and India. The country, suffering a severe economic crisis due to foreign currency shortages, needs immediate policy shifts to stabilize its fragile economy. Economic growth is forecasted at 4.4% in 2024 by the World Bank.

(With inputs from agencies.)