Sri Lanka requests IMF bailout

AFP: Sri Lanka has made a formal request for an IMF bailout package to aid its struggling economy after a sharp slowdown in growth and with its budget deficit widening, officials said Saturday.

The International Monetary Fund confirmed the island nation had asked for assistance, but did not give details on the value of a potential program or say whether it would grant the request.

“The IMF has received a request for a program with Sri Lanka,” the fund said in a statement from its headquarters in Washington DC.

Sri Lanka enjoyed a blistering economic growth rate averaging more than 8 %for two years after a prolonged civil war ended in 2009.

But the pace of expansion has since slowed, falling to 4.8 %in the third quarter of 2015, according to official data. 

Prime Minister Ranil Wickremesinghe told parliament last month that he was keen on negotiating an IMF bailout to deal with the fallout of a global economic downturn on his country of 21 million people.

Sri Lanka’s government sought an IMF bailout immediately after taking power in January last year but the fund turned down the request, saying the country’s reserves were at a comfortable level.

It received $2.6 billion from the IMF in 2009 to boost its financial reserves, which had dropped below $1 billion at the height of fighting between Tamil Tiger rebels and government forces.