Sri Lanka President Dissanayake Urges IMF To Balance Economic Recovery Plan

Sri Lankan President Anura Kumara Dissanayake on Monday urged the International Monetary Fund to consider the economic hardships faced by the people of the island nation and strike a balance in the economic recovery programme.

The IMF team on Sunday arrived in Sri Lanka to carry out the third review of the nearly $3 billion bailout facility.

The third review should lead to the fourth tranche of the 4-year facility. It would be around $330 million as was the case in the previous three tranches, Finance Ministry officials said.

Sri Lanka’s economic reform programme is supported by the IMF's Extended Fund Facility.

Dissanayake met the IMF’s Sri Lanka mission chief Peter Breuer and the delegation. He urged the IMF team to consider the economic hardships faced by the people and strike a balance in the economic recovery programme, the release added.

In his presidential election campaign, President Dissanayake vowed to renegotiate the IMF to water down hard conditions laid down for the recovery.

Dissanayake’s National People’s Power (NPP) was highly critical of the cost recovery-based utility tariffs and high taxes which came conditional to the bailout.

The IMF team had earlier met the former president Ranil Wickremesinghe who had successfully steered the IMF programme for economic recovery as a result Sri Lanka was described as one of the quickest to recover from a crippling economic crisis.

Sri Lanka plunged into an economic crisis when the island nation declared sovereign default in mid-April of 2022, its first since gaining independence from Britain in 1948. Almost civil-war-like conditions and months of public protests led to the fleeing of the then president Gotabaya Rajapaksa.

“The IMF delegation praised our two-year efforts to achieve recovery they warned that deviation from it can mean hardships again for the local economy," Shehan Semasinghe one of the junior ministers under the Wickremesinghe administration, who was responsible for the IMF negotiations, said.

Wickremesinghe’s IMF-dictated reforms became unpopular and he finished third behind Dissanayake in the September presidential election.

Dissanayake’s NPP recorded a resounding victory at last week’s parliamentary election winning absolute control of the House.