By:Staff WriterColombo (LNW): The International Monetary Fund (IMF) Asia-Pacific Department Director Krishna Srinivasan says Sri Lankan authorities and advisors will have to consider private creditors’ debt restructure proposal which includes GDP linked bonds, according to a report filed on the sidelines of WB /IMF annual meetings in Morocco.
Sri Lanka’s private creditors have sent a proposal on how to restructure US $12 billion of overseas debt, including a new type of bond designed to ease repayments in case of future economic pressure, said two sources with direct knowledge of the matter, as reported by Sri Lankan media on Friday (13) morning.
The Director of the Asia-Pacific Department of the IMF said the role of the fund comes in terms to see how any kind of agreement is consistent with the debt targets.
The IMF and the World Bank are pushing ahead with reforms of SOEs, including the electricity sector, said Krishna Srinivasan, the Director of the Asia-Pacific Department (IMF).
“Efficiency in the energy and electricity sectors could be increased, with structural reforms. In general, SOE reforms are important to Sri Lanka and that is part of the program that we have.
The IMF and the World Bank is pushing ahead with reforms of SOEs, including the electricity sector, he noted”
“We fully sympathize with and understand the hardships of the people in terms of falling wages, cost of living increases, and so on. We are fully sympathetic to that. But again, the program, we do have prices reflecting cost recovery.
It is important because, otherwise, the electricity sector faces losses, and that becomes a public problem down the road,” said Srinivasan on Friday (13).
The much awaited World Economic Outlook of the International Monetary Fund was released on Tuesday (10).
However, Sri Lanka’s projections for 2023–28 are excluded from publication owing to ongoing discussions on sovereign debt restructuring, according to media reports.
The analysis and projections contained in the World Economic Outlook are integral elements of the IMF’s surveillance of economic developments and policies in its member countries, of developments in international financial markets, and of the global economic systems.
“In a more global perspective, Pierre-Olivier Gourinchas, Economic Counselor and Director of the Research Department, IMF stressed that structural reforms at the right time are key, and the first generation of reforms will help unlock more growth based reforms.
On Sri Lanka, Daniel Leigh, Division Chief, Research Department, IMF pointed out that Sri Lanka must continue with its sustained reforms, and current reforms have started to bear fruit.
He went on to note that despite securing some degree of stability, full recovery for Sri Lanka is still not assured.