10 Commitments Loom as Sri Lanka Makes Strides on IMF Bailout
By: Staff Writer
January 29, Colombo (LNW): According to independent analysis from Verité Research Sri Lanka has met most of its initial commitments under its International Monetary Fund (IMF) bailout program, but concerns remain over delays in governance and transparency reforms.
The island nation, grappling with its worst economic crisis in decades, secured a crucial $2.9 billion loan from the IMF in March 2023.
Verité Research, which tracks Sri Lanka’s progress under the Extended Fund Facility (EFF) program via its online platform “IMF Tracker,” reports that of the 73 commitments due by end-November 2023, 60 have been met, albeit with some delays.
However, 13 commitments remain unfulfilled, raising concerns about Sri Lanka’s commitment to crucial reforms.
Five of these were irreversibly missed and cannot be carried forward, while eight have been deferred to the second phase of the program leading up to the next IMF review.
Adding to the complexity, the IMF has modified due dates for an additional 27 commitments initially set for after November, categorizing them as “pending” alongside the eight carried-forward obligations. Moreover, Sri Lanka and the IMF have added 75 new commitments to the program.
Consequently, the second phase of the EFF kicks off with a staggering 110 commitments hanging in the balance. Notably, four specific governance and transparency-related commitments remain unfulfilled, including the launch of an online transparency platform for public procurement and tax exemptions, and the establishment of a merit-based selection process for directors of the anti-corruption commission.
he second review of Sri Lanka’s $2.9 billion bailout with the IMF could be completed in the first half of 2024, provided it manages to meet debt restructuring and revenue targets set under the programme, an official said on Wednesday.
The International Monetary Fund (IMF) said its executive board cleared the first review of Sri Lanka’s $2.9 billion bailout on Tuesday, providing about $337 million in funds to help tackle the fallout from the country’s worst financial crisis in decades.
The South Asian island nation is recovering from its worst financial crisis since its independence in 1948 that sent the economy into freefall last year with soaring inflation, currency depreciation and low foreign reserves.
The total amount sent so far to Sri Lanka now stands at about $670 million, according to the IMF.
An IMF delegation will travel to Sri Lanka in March and the second review could be finalised about two months afterwards, Peter Breuer, senior mission chief for Sri Lanka, told an online press briefing in Washington.
