WASHINGTON – Sri Lanka’s leftist president received a boost from Washington with the International Monetary Fund greenlighting a roughly $330-million payout under an existing loan agreement.
The IMF board approved the latest review of an existing four-year loan agreement, noting in a statement that Sri Lanka’s program performance “has been strong,” and that almost all quantitative targets had been met.
The board’s approval gives Sri Lanka “immediate access” to around $334-million to support its economic policies and reform program, the IMF said, and follows an earlier staff level agreement struck with the Sri Lankan authorities.
“Reforms in Sri Lanka are bearing fruit and the economic recovery has been remarkable,” IMF deputy managing director Kenji Okamura said in a statement.
“Inflation remains low, revenue collection is improving, and reserves continue to accumulate,” he said, adding that the IMF expects Sri Lanka’s real GDP to have recovered “40 percent of its loss incurred between 2018 and 2023.”
“The recovery is expected to continue in 2025,” he said.
Sri Lanka secured the roughly $3-billion loan program last year to help it address an economic crisis that had fueled months of street protests, which led to the toppling of then-president Gotabaya Rajapaksa.
Friday’s announcement comes less than two weeks after the country’s leftist President Anura Kumara Dissanayake — who took office in September — unveiled his maiden budget.
In it, Dissanayake announced plans to reverse a 2020 ban on foreign car imports, introduced to save foreign currency, which had deprived the authorities of a lucrative revenue stream.
Dissanayake said the ban’s end would bolster state revenue to meet the tax target of 15 percent of GDP, which Sri Lanka must achieve under the terms of its IMF bailout agreement.
