The International Monetary Fund notes that the present crisis in Sri Lanka is a combination of an economic and humanitarian crisis, citing that the present crisis is somewhat different from the previous crises the island nation had faced.
Resident representative of the IMF in Sri Lanka Sarwat Jahan speaking EXCLUSIVELY to News 1st on its Newsline program said “Sri Lanka has never faced debt sustainability issues before. This is the first time that Sri Lanka has announced a moratorium on its debt service. The situation is actually quite grave, and it is going to take quite a bit of effort on all to bring Sri Lanka back to its growth potential.”
In early 2023, the International Monetary Fund approved a $3 billion bailout for Sri Lanka, paving the way for the country to restructure its debt and for the economy to improve in 2024.
The South Asian country is grappling with its worst financial crisis in decades, and the IMF’s decision will allow an immediate disbursement of a $333 million loan over four years.
“The main part is to recognize how deep the crisis is, and then to for all Sri Lankan to contribute to the recovery, which means taking ownership of the deep reforms that are needed,” said Sarwat Jahan adding that these reform including tax reforms, SOE reforms, and structural reforms that will help build institutions so that Sri Lanka will not face such a situation again.