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May 27, 2022

Lanka facing hardship economy: IMF

Foreign Affairs News Desk

An International Monetary Fund (IMF) team led by Peter Breuer and Masahiro Nozaki conducted a virtual mission with the Sri Lankan authorities during May 9-24 on an economic program that could be supported by an IMF lending arrangement. The IMF team met with high level Sri Lankan government officials including Prime Minister Ranil Wickremesinghe.

According to the IMF news report, the team has found that Sri Lanka is facing difficult economic conditions and severe balance of payments problems. Recent economic indicators suggest that economic activities have been negatively affected by fuel and power shortages.

Inflation has accelerated driven by many factors, including the shortages of goods, fuel price increases, and currency depreciation.

The IMF team held technical discussions on a comprehensive reform package to restore macroeconomic stability and debt sustainability.

The team made good progress in assessing the economic situation and in identifying policy priorities to be taken going forward, added the report.

IMF will continue to monitor the economic and political situation very closely and engage with the authorities to formulate concrete measures under an IMF-supported program, as well as broader stakeholders to support a timely resolution of the crisis and commitment to support Sri Lanka at this difficult time, in line with the IMF’s policies, said the IMF.