IMF says further discussions will resume post-Presidential election

Saturday, 14 September 2024 01:11 - - {{hitsCtrl.values.hits}}

Says timing of third review will be discussed with Govt. following elections
Notes ready for discussions on DSA
Asserts reform efforts are bearing fruit, but country is not out of the woods yet
Insists on importance of safeguarding those hard won gains

IMF Communications Department Director Julie Kozack

International Monetary Fund (IMF) Communications Department Director Julie Kozack on Thursday confirmed that its next program review is scheduled for mid-October and further discussions would only resume once the election results are clear and the new Government in place.

“From the IMF’s position, what we see is a program that has made significant achievements, but that it is important to safeguard these achievements to enable the country to fully emerge from one of its worst crises. The timing of the third review will be discussed with the Government following the elections. We will move forward with program discussions after the Presidential Elections take place and a new Government, or the outcome based on the choice of the people, we will be ready to go with that,” she said in response to a question on speculations about revisiting the Debt Sustainability Assesement (DSA) during a media briefing held on Thursday.

She outlined the IMF’s position on the ongoing economic program ahead of the Presidential Election and stressed the importance of maintaining economic reforms that have shown positive results, while also recognising the challenges particularly in the area of debt restructuring.

“Regarding some of the specific questions about the Presidential Elections, this is really for the people of Sri Lanka to decide, right. Achieving the program’s objectives is a key priority to give Sri Lanka a chance to emerge from one of its worst crises in history. As I have already noted, a lot of progress has been made, but the country is not out of the woods yet, and it is important to safeguard those hard won gains,” she added.

She recalled that on 12 June, the Executive Board completed the 2024 Article IV Consultation and the Second Review of the EFF program, which provided the country with access of about $ 336 million.

“Program performance remains strong. Reform efforts are bearing fruit. Economic growth is starting to revive. Inflation is coming down. Reserves, international reserves are increasing, and revenue mobilisation is improving. Nonetheless, important vulnerabilities do remain and sustaining reform momentum is going to be essential,” she reiterated.

Kozack made it clear that the IMF’s role remains strictly financial and advisory. “The execution of the domestic debt restructuring and finalising the agreement with the official creditor committee and China EXIM Bank are major milestones. The staff assessed the joint working framework and the staff has also provided an assessment of this framework to the Sri Lankan authorities. Furthermore, at the request of the Sri Lankan authorities, the IMF staff has shared this assessment with the financial advisors of the country’s bondholders,” she explained. (https://www.imf.org/en/News/Articles/2024/09/12/tr091224-transcript-of-imf-press-briefing)