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Lanka needs to do more on debt restructuring before a bailout package is finalised, says IMF

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The International Monetary Fund (IMF) on June 30 said it has concluded “constructive and productive” discussions with Sri Lankan authorities, but warned that the crisis-ridden island nation needs to do more on debt restructuring and step up structural reforms to address corruption vulnerabilities before a bailout package is finalised.

Sri Lanka is going through the worst economic crisis since its independence from Britain in 1948 and needs to obtain at least $4 billion to tide over the acute shortage in foreign exchange reserves.

“The IMF team had constructive and productive discussions with the authorities on economic policies and reforms to be supported by an Extended Fund Facility arrangement,” the IMF said in a statement.

“The discussions will continue virtually with a view to reaching a staff-level agreement on the Extended Fund Facility arrangement in the near term,” it added.

However, due to the unsustainability of public debt, there is the requirement for “adequate financing assurances from Sri Lanka’s creditors that debt sustainability will be restored,” it warned.

The IMF team visited Colombo on June 20 to continue discussions on an economic programme that could be supported by an IMF lending arrangement, building on the progress made during the May 9-24 virtual mission.

The objectives of the new IMF-supported programme would be to restore macroeconomic stability and debt sustainability, while protecting the poor and vulnerable, safeguarding financial stability, and stepping up structural reforms to address corruption vulnerabilities and unlocking Sri Lanka’s growth potential, it said. The IMF also warned that high fiscal deficit had to be reduced, as well as taming rising inflation.

Since revenue was weak, far-reaching tax reforms were urgently needed to achieve these objectives, it added. On Monday, the Sri Lankan government announced that only essential services will operate from midnight till July 10 and all other operations will be temporarily suspended as the island nation of 22 million faces an acute fuel shortage.

The nearly-bankrupt country, with an acute foreign currency crisis that resulted in foreign debt default, had announced in April that it is suspending nearly $7 billion foreign debt repayment due for this year out of about $25 billion due through 2026. Sri Lanka’s total foreign debt stands at $51 billion.

Since June 24, no fuel tankers with supplies have arrived in the island nation while the state-run fuel retailer Ceylon Petroleum Corporation says no new orders have been placed.

Meanwhile, the government’s statistics office said on Tuesday that the economic growth in the first quarter of this year is projected to see a minus 1.6% growth due to the economic crisis. A release said that fuel shortages had impacted all sectors with reduced production contributing to the negative growth.

The Sri Lankan economy has virtually come to a grinding halt after it has run out of foreign exchange reserves to import fuel. Sri Lankans continue to languish in long fuel and cooking gas queues as the government is unable to find dollars to fund imports.

So far, there have been an estimated thirteen deaths in fuel queues due to exhaustion, physical ailments or accidents. Irate citizens want President Gotabaya Rajapaksa and his government to resign immediately for their inability to tackle the fuel shortages.



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Death toll in violent clashes at Negombo Prison rise to 25

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It has been reported quoting police sources that the death toll from the renewed unrest at the Negombo Prison which  this morning, has  risen from nineteen  to twenty five (25).

A clash initially broke out between two groups of inmates (a group of remand prisoners and a group of convicted inmates serving sentences) at the Negombo Prison at around 1.00 p.m. on Sunday (05).

Two inmates died in yesterday’s clash, while around 40 others sustained injuries and are  receiving treatment at hospital.

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The Government is committed to equipping children with new technology and knowledge – PM

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Prime Minister Dr. Harini Amarasuriya stated that the children of Sri Lanka are well capable of viewing the world with creativity and critical ways of thinking, and that the Government is committed to equipping them with the required knowledge and modern technologies necessary to realize their full potential.

The Prime Minister made these remarks while attending the opening of the ’Arumasiya’ Exhibition and the occasion of laying the foundation stone for a new three-storey building at Balangoda Vidyaloka Central College, on the 4th of July.

During the visit, the Prime Minister officially declared open the exhibition showcasing the students’ innovations and creative talents and commended them for their remarkable achievements. The Prime Minister also participated in the ceremony of laying the foundation stone for the construction of the College’s new three-storey building.

Addressing the occasion, Prime Minister Dr. Harini Amarasuriya stated:

“It is a pleasure to participate in this special event at Balangoda Vidyaloka Central College, the school where Sri Lanka’s first female Prime Minister received her education

I had the opportunity to visit the exhibition featuring the outstanding creations and innovations of the students. What I witnessed was a group of talented young people who have moved beyond textbook learning and are capable of viewing the world with creativity and critical thinking.

We are introducing a new education reform process that moves away from a rote-learning, examination-oriented system towards a practical and skills-based one. The Government is now systematically completing all the necessary preparations to implement the new education reforms scheduled to commence in 2027.

Our objective is to ensure that every child leaving school has access to vocational and technical education that matches their individual talents and meets the demands of the modern labour market. We are committed to transforming vocational education into a field that enjoys the same dignity and recognition as university education.

Finally, I commend the Principal and the academic staff of Balangoda Vidyaloka Central College for organizing this exhibition, and to the students and parents whose dedication made this event a success.”

The event was attended by Members of Parliament for Ratnapura District Wasantha Pushpa Kumara and Sunil Rajapaksha, the Mayor of Balangoda and members of the Municipal Council, the Zonal Director of Education, the Principal and academic staff of Balangoda Vidyaloka Central College, parents, and students.

Prime Minister’s Media Division

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Appointment of SPO to probe AG on hold until establishment of Ind. Public Prosecutor’s Office

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Ajith / Harshana

The appointment of a Special Parliamentary Ombudsman (SPO) to inquire into the complaints against the Attorney General, as promised in the NPP manifesto, is on hold, pending the establishment of an Independent Office of the Public Prosecutor and provincial Sub Officers.

Authoritative sources told The Island that the Justice and National Integration Ministry was awaiting the recommendations, regarding the new legislation for the establishment of such an Office, from a Committee of Technical Experts, chaired by Justice Yasantha Kodagoda, PC.

Responding to a query raised in Parliament by SJB lawmaker Ajith P. Perera about the delay in appointment of SPO, Justice and National Integration Minister Harshana Nanayakkara said the government couldn’t take a decision until the Kodagoda Committee made recommendations.

Nanayakkara said that the positioning of the SPO couldn’t be decided before they differentiate the powers of the Attorney General and the an Independent Office of the Public Prosecutor and provincial Sub Officers.

According to the NPP manifesto, provincial Sub Officers were to be established under a senior Additional Solicitor General.

Opposition sources pointed out that the relevant Cabinet decision was taken on 7 May 2025. According to the Cabinet Office, the government decided to establish an Independent Office of the Public Prosecutor and provincial Sub Officers in line with a proposal made by the United Nations High Commissioner for Human Rights, in her final report on Sri Lanka, submitted in September, 2024.

By Shamindra Ferdinando

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