ECONOMYNEXT – Sri Lanka will start discussions with its creditors on a final debt restructuring process, State Finance Minister Shehan Semasinghe said following his meeting with the top officials of the International Monetary Fund (IMF)and World Bank in Washington.
The IMF approved a four-year, $3 billion loan to the island nation on March 20 with an ambitious reform package.
The sovereign debt defaulted economy has seen some positive sentiments since the IMF loan approval, but it is yet to see a surge in consumer spending and private sector growth since the unprecedented economic crisis unfolded last year.
Minister Semasinghe on behalf of the government participated in the ongoing IMF/World Bank Spring meetings in Washington where he met top officials of the both multilateral funding agencies.
“Sri Lanka was greatly appreciated for its dedication and transparency in its economic reform process,” he told the media on Thursday (13) from Washington after the meetings.
The ongoing meetings are the first since the IMF loan approval.
“The IMF and World Bank pledged its maximum support and required intervention, if necessary, to see Sri Lanka’s recovery to a better economy. We discussed programmes with the senior management of the World Bank and IMF to strengthen the economy more,” Semasinghe said.
“As the next phase, we have to discuss the final process of the debt restructuring. Accordingly, we expect to discuss the final process of the debt restructuring with our creditors in the next few months.”
Analysts say Sri Lanka has seen some recovery, but it is too premature to celebrate due to uncertainty over a possible domestic debt restructuring and legal process in a US court over defaulting for some sovereign bond holders.
Later on Thursday, Japan, India and France will announce the launch of the debt restructuring negotiation process on Sri Lanka. (Colombo/April13/2023)