• Wednesday, May 22, 2024
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Bankrupt Sri Lanka’s recovery ‘Not Yet Assured’ – IMF

10 African countries with the highest debts to IMF

Despite having gotten unchecked inflation under control, the lender of last resort, based in Washington, declared Sri Lanka had failed to meet its income targets and ensure growth.

“Despite early signs of stabilisation, full economic recovery is not yet assured,” the IMF said.

The economic collapse of last year led to severe shortages of food, fuel, and medicine as well as months of social upheaval that ultimately resulted in the ouster of the then-president Gotabaya Rajapaksa.

Although Ranil Wickremesinghe, his successor, increased taxes and ended energy subsidies, the IMF reported that state revenue was still below projections.

Read also: Fuel subsidy, exchange rate reforms to boost Nigerian economy – IMF

Without a declaration about the release of the second $330 million tranche, an IMF delegation’s two-week visit to Sri Lanka came to an end.

After the most recent negotiations, Colombo had anticipated that the funding would be transferred.

However, the IMF claimed that it was still examining “financing assurances” from outside creditors over the restructuring of Sri Lanka’s bilateral and private debt.

After defaulting on its $46 billion in foreign debt in April 2022, Colombo is in discussions with its private creditors to restructure Sri Lanka’s international sovereign obligations.

A portion of the domestic debt has already been adjusted, and discussions with bilateral lenders are currently continuing.

China, which is responsible for 52% of the island’s bilateral debt, has pledged to support Colombo but has not made its stance on restructuring public.