IMF says economic Situation is improving.
The economic situation in Sri Lanka is improving says the International Monetary Fund after facing its worst economic crisis,two years ago.
Inflation has come down from a peak of 70 percent in 2022 to 5.9 percent last month and the country’s economy expanded in the second half of last year following a year and a half of contraction.
Sri Lanka’s year-on-year economic expansion in the third quarter of 2023 was 1.6 percent, and in the fourth quarter 4.5 percent.
The economic crisis in early 2022 left Sri Lankans suffering from severe shortages of food, medicine, fuel and power. This resulted in strident protests the immediate removal of then-President Gotabaya Rajapaksa.
Sri Lanka then turned to the IMF for assistance,under the Ranil Wickremesinghe led Government.
Under the current four-year bailout programme, the IMF is to disburse $2.9bn in tranches after biannual reviews of whether the country is imposing needed economic reforms.
The country has received two payments so far and also has received promises of debt forgiveness from major creditors like India, Japan and China. The government also is in talks with private creditors.
On Wednesday, the IMF said a team of its officials had reached an agreement with Sri Lankan authorities on the second review of economic reforms.
Once the agreement is approved by the IMF executive board, Sri Lanka would have access to the latest tranche of $337m, for a total so far of about $1bn.
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