COLOMBO: The International Monetary Fund began a review on Thursday of Sri Lanka’s bailout programme launched after its worst economic crisis, with Colombo officials hopeful of securing a desperately needed $330 million more in funding.
Last year’s economic crash sparked dire food, fuel and medicine shortages, as well as months of civil unrest that eventually toppled then-president Gotabaya Rajapaksa.
The financial agency is reviewing the $2.9 billion four-year bailout programme granted in March.
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Sri Lanka’s finance minister Ranjith Siyambalapitiya said he was “very hopeful of getting the second tranche of $330 million” from the IMF.
Colombo is still in discussion with its private creditors to restructure Sri Lanka’s international sovereign bonds. Talks are also underway with bilateral lenders.
China, which accounts for over 50 percent of the island’s bilateral debt, has not made its position on debt restructuring known, but has agreed to support Colombo.
The IMF said in June that Sri Lanka’s economy showed “tentative signs of improvement” but recovery remains challenging and Colombo must pursue painful reforms.
Sri Lanka has sharply raised taxes and removed energy subsidies in a bid to shore up state revenue and build reserves necessary to finance essential imports.
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