Sri Lanka’s President Anura Kumara Dissanayake has reversed his stance on renegotiating the country’s International Monetary Fund (IMF) bailout, emphasizing the fragility of the economy and the need for continuity in its recovery plan.
In his inaugural address yesterday to the newly-elected parliament, where his National People’s Power (NPP) party commands a two-thirds majority, Dissanayake stressed the urgency of adhering to the $2.9 billion IMF program. This move marks a significant departure from his campaign pledge to reassess the agreement secured by his predecessor, Ranil Wickremesinghe.
“The economy is in such a state that it cannot take the slightest shock… there is no room to make mistakes,” Dissanayake declared, ruling out any renegotiations with the IMF or creditors. He further explained that restarting the process would jeopardize the nation’s recovery, describing the bailout as a critical lifeline.
IMF Conditions and Economic Recovery
The IMF bailout, finalized early last year, requires Sri Lanka to implement tough reforms, including higher taxes, phasing out energy subsidies, and restructuring over 50 loss-making state enterprises. Although these measures have been contentious, they are seen as essential steps to revive the economy, which contracted by 7.8% in 2022 amid its worst financial crisis in decades.
Dissanayake confirmed that talks with an IMF delegation are underway to conclude the delayed third review of the four-year loan program, with Sri Lanka anticipating the release of the next $330 million tranche soon.
Debt Restructuring in Focus
In line with IMF demands, Dissanayake’s administration has endorsed a controversial restructuring of $14.7 billion in foreign commercial debt—a plan initiated by Wickremesinghe. This move is expected to rebuild investor confidence and stabilize the island nation’s economic outlook.
The president’s pivot reflects a pragmatic approach, signaling that political commitments must yield to economic realities. “This is not the time to discuss if the terms are good or bad, if the agreement is favorable to us or not,” he noted, emphasizing the need to prioritize stability and recovery over political debates.
With inputs from News Agencies
So foolish for the people to believe his pledges. He is doing and following everything and anything invented by the great wickremesinghe. He fooled his own people and lied his way through.