The International Monetary Fund (IMF) is set to announce the dates for the third review under the Extended Fund Facility (EFF) program for Sri Lanka, as stated by Ms. Julie Kozack, Director of the Communications Department at the IMF, during a recent press briefing.
Ms. Kozack noted the progress made since the IMF Executive Board completed the 2024 Article IV Consultation and the second review of the EFF program on June 12, 2024. This review granted Sri Lanka approximately $336 million to support its economic policies and reforms. She highlighted the strong performance of the program, which has led to notable improvements in economic growth, inflation reduction, reserve accumulation, and revenue mobilization. However, she also stressed the need to maintain the momentum of reforms in light of existing vulnerabilities and uncertainties.
A high-level IMF team, led by Krishna Srinivasan, Director of the Asia Pacific Department, is currently in Colombo to meet with President Anura Kumara Dissanayake and his newly appointed economic team. The delegation is reviewing the latest economic developments and reform objectives with Sri Lankan authorities. The announcement of the dates for the third review will follow the conclusion of the team’s visit.
Additionally, Ms. Kozack mentioned that an agreement in principle was reached on September 18, 2024, between Sri Lanka and international bondholder representatives, pending confirmation by the Official Creditor Committee of Sri Lanka. This agreement marks significant progress in the country’s debt restructuring efforts.
In a recent meeting, President Dissanayake engaged directly with the IMF delegation, including Krishna Srinivasan and Senior Mission Chief Dr. Peter Breuer, to discuss the ongoing IMF program’s progress. He reaffirmed the government’s broad alignment with the program’s objectives while emphasizing the importance of achieving these goals through alternative methods that alleviate the financial burden on citizens. The President also indicated plans to provide relief to those affected by high VAT and income taxes.