The International Monetary Fund (IMF) expressed its willingness to work closely with President Anura Kumara Dissanayake’s new government on Tuesday and stated that it will talk about when to conduct the next review of Sri Lanka’s loan plan.
In a statement, IMF said, “We look forward to working together with President Dissanayake and his team towards building on the hard-won gains that have helped put Sri Lanka on a path to economic recovery since entering one of its worst economic crises in 2022.”
In July, the announcement of the presidential election corresponded with negotiations between the government of former president Ranil Wickremesinghe and the IMF for the delivery of the third tranche of the $2.9 billion facility.
Following the third evaluation, which the IMF postponed until after last weekend’s election, a disbursement of nearly $360 million was expected.
“We will discuss the timing of the third review of the IMF-supported programme with the new administration as soon as practicable,” the IMF said.
The newly formed government expressed optimism about engaging with the IMF this week after assuming office on Monday. When Sri Lanka faced its worst-ever economic crisis and there was a lack of food and fuel, Wickremesinghe successfully secured the IMF bailout.
The four-year facility was authorised by the IMF with rigorous reform requirements. Sri Lanka was aided by Indian support worth $4 billion during the crisis between 2022 and 2023 when the IMF deal came through.
Wickremesinghe upset the electorate by implementing the majority of the IMF conditionalities. He finished third with just 17 per cent of votes behind 42 per cent by Dissanayake, whose left party was the front-runner.
Under the new administration, the island nation will have to overcome the difficulty of coming to a staff-level consensus on the next stage of the IMF plan and creating a budget that aligns with its objectives.
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