Sri Lanka Economic Crisis: Global lender International Monetary Fund (IMF) today (Saturday) has approved the third review of Sri Lanka’s $2.9 billion relief package. IMF announced to release an installment of 333 million dollars (about 3 billion dollars) to the country suffering from economic crisis. Thus, till now Sri Lanka has received a total capital of 1.3 billion dollars. However, IMF has also warned that the South Asian economy is still in a weak condition.
What did the IMF say in the statement
IMF has given this information in a press release and it also said that signs of economic recovery are visible in Sri Lanka. The IMF said in the statement that the country will have to complete its $12.5 billion bond holder loan restructuring and $10 billion debt restructuring with bilateral lenders such as Japan, China and India to take the process forward. The IMF relief package given to Sri Lanka in March 2023 has proved helpful in stabilizing its economic situation. The country was facing its worst financial crisis in seven decades in the year 2022.
Focus on revenue and improvement necessary
IMF Senior Mission Chief Peter Breyer said it is important to continue increasing tax revenues and reforming state-owned enterprises to achieve the primary surplus target of 2.3 percent of GDP next year. “We have agreed on a plan to achieve their priorities and objectives,” Breyer said. Once it is presented to Parliament, a fourth review process will move forward. Officials have agreed to stay within the program’s guidelines. Have promised.
Sri Lanka’s new President Anura Kumara Dissanayake said that an interim budget is likely to be presented in Parliament in December and he hopes to complete the debt restructuring by the end of December.
circumstances during the crisis
During Sri Lanka’s economic crisis, a severe dollar shortage drove inflation to 70 percent, the currency fell to record lows and the economy shrank by 7.3 percent. Last year this decline was 2.3 percent. However, in recent months the Sri Lankan rupee has strengthened by 11.3 percent and inflation has ended. Here a decline of 0.8 percent was recorded in prices last month.
economic growth expectations
According to the World Bank, Sri Lanka’s economy is likely to grow by 4.4 percent this year, which has been seen for the first time in the last three years. The IMF also said that Sri Lanka needs to focus on its economic plans and take timely steps to ensure a sustainable recovery.
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