Sri Lanka's New President Anura Kumara Dissanayake Seeks IMF Support Amid Economic Crisis

Newly elected Sri Lankan President Anura Kumara Dissanayake is set to enter negotiations with the IMF to advance the country’s $2.9 billion bailout programme. His administration aims to reduce high income taxes and invest in welfare amid a financial crisis, while expediting a $25 billion debt restructuring process.

Sri Lanka's new President Anura Kumara Dissanayake announced intentions to commence negotiations with the International Monetary Fund (IMF) to progress the nation's $2.9 billion bailout initiative. Elected last Saturday, Dissanayake gained favor with voters through his promises to cut taxes, combat corruption, and lower living costs.

Dissanayake plans to alter revenue targets set by the IMF programme, aiming to reduce high income taxes and allocate funds for welfare programs benefiting millions of Sri Lankans impacted by the financial crisis. 'Additionally, to advance our debt restructuring program, we are negotiating with relevant creditors to expedite the process and secure necessary debt relief,' stated Dissanayake in a televised speech, referring to the ongoing $25 billion debt rework effort.

The IMF announced on Tuesday that it would collaborate with Dissanayake and address the timing of its third review of the existing programme with Sri Lanka 'as soon as practicable.' On the same day, Dissanayake dissolved the parliament, aiming to fortify his position in the upcoming general election on November 14. His coalition currently holds a mere three seats in the 225-member parliament elected in August 2020.

Sri Lanka's economy suffered a severe collapse two years ago due to a dollar shortage, driving inflation to 70% in September 2022 and leading the country to default on its foreign debt.

(With inputs from agencies.)