IMF approves Sri Lanka's $2.9b bailout

IMF approves third review of Sri Lanka's bailout, releasing $333 million amid ongoing economic challenges.

COLOMBO:

The International Monetary Fund (IMF) approved the third review of Sri Lanka's $2.9 billion bailout on Saturday but warned that the economy remains vulnerable. In a statement, the global lender said it would release about $333 million, bringing total funding to around $1.3 billion, to the crisis-hit nation. It said signs of an economic recovery were emerging.

The country still needs to complete a $12.5 billion bondholder debt restructuring and a $10 billion debt rework with bilateral creditors including Japan, China and India to take the programme forward, the IMF said.

The IMF bailout secured in March last year helped stabilise economic conditions after cash-strapped Sri Lanka plunged into its worst financial crisis in more than seven decades in 2022. Staying in line with tax revenue requirements and continuing reforms of SOEs will remain crucial to hitting a primary surplus target of 2.3%, said IMF Senior Mission Chief Peter Breuer.