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Sustaining reforms critical for Sri Lanka: IMF
(AFP)Sri Lanka’s painful austerity measures were “bearing fruit” and must be sustained, the International Monetary Fund said Friday as the country’s new president sought changes to its $2.9 billion bailout.
Leftist leader Anura Kumara Dissanayake won last month’s presidential election promising to reverse steep tax hikes, raise public servant salaries and renegotiate an unpopular IMF bailout secured by Colombo last year.
The avowed Marxist held his first meeting with Fund representatives in Colombo this week, saying he wanted to reduce the tax burden on lower income households.
In response, the Washington-based lender of last resort stressed that it was important not to jeopardise Sri Lanka’s hard-won economic recovery.
“Reform efforts are bearing fruit in terms of reviving economic growth, lowering inflation, boosting reserves and improving revenue mobilisation,” spokesperson Julie Kozack said in Washington.
“Important vulnerabilities and uncertainties do remain, and this means that sustaining reform momentum is critical.”
Sri Lanka can draw down a fourth tranche of $336 million in IMF funds only if it is satisfied that leaders are sticking to the revenue and spending targets of the rescue plan.
Dissanayake’s office said Thursday he reaffirmed “broad agreement” with the objectives of the IMF programme but “emphasised the importance of achieving these objectives through alternative means that relieves the burden off the people”.
The new president has said he also wants to conclude a deal to restructure $12.5 billion in international sovereign bonds and secure more concessions for the cash-strapped nation.
Analysts say Dissanayake has little room to reshape the terms of the IMF deal.
“There are certain red lines that the IMF will not agree to negotiate,” Murtaza Jafferjee of the Colombo-based economic think tank Advocata told AFP soon after Dissanayake’s election.
The IMF was unlikely to budge on core components of the bailout, including a ban on printing money as well as revenue and spending targets agreed by the last administration, he said.
Sri Lanka defaulted on its $46 billion foreign debt in 2022 after running out of foreign exchange during its worst-ever financial crisis.
The 2023 IMF bailout helped end crippling shortages of food, fuel and medicine and returned Sri Lanka’s economy to growth, but its austerity measures left millions struggling to make ends meet.
Dissanayake, a member of a once-marginal leftist party, was elected on the back of public resentment over perceived corruption and mismanagement that precipitated the economic bust.
Days after he was sworn into office, he called snap parliamentary elections for next month.Any fresh deal with bondholders or the IMF will require approval by the next parliament, which is due to hold its first session on November 21.
Outgoing US Ambassador to Sri Lanka Julie Chung met Opposition Leader Sajith Premadasa yesterday at his office in Colombo, as she concludes her tenure in the country and prepares to return to the United States. The meeting was held as a farewell occasion, during which Premadasa expressed his gratitude and respect to Ambassador Chung for the support she extended to Sri Lanka during her service. He noted that the outstanding contributions she made as Ambassador will never be forgotten.
Sri Lanka has risen to 93rd place in the Henley Passport Index 2026, with its passport providing access to 39 destinations, according to the latest rankings released by Henley & Partners.
The Henley Passport Index ranks passports based on the number of destinations holders can enter without a prior visa, using data from the International Air Transport Association (IATA) and analysis by Henley & Partners.
Singapore retained the top position for the second consecutive year, offering visa-free or visa-on-arrival access to 192 destinations. Japan and South Korea shared second place, while Denmark, Luxembourg, Spain, Sweden, and Switzerland ranked third with access to 186 destinations.
Sri Lanka was ranked 96th in the previous index, with access to 44 destinations.
Despite its lower level of access, the Sri Lankan passport continues to rank above several South Asian Association for Regional Cooperation (SAARC) countries, including Nepal, Bangladesh, and Pakistan.
Speaker Dr Jagath Wickramaratne, has engaged on his maiden visit to India to participate in the 28th Conference of Speakers and Presiding Officers of the Commonwealth in New Delhi. According to the Indian High Commission in Colombo, Speaker of India’s Lok Sabha, Om Birla, held a bilateral discussion with Speaker Dr Jagath Wickramaratne on the sidelines of the event.
The discussion focused on further deepening of Parliamentary Exchanges between our two democracies.
Commenting on the meeting, Speaker Om Birla said the discussions highlighted close Parliament-to-Parliament cooperation, including regular exchanges, formation of friendship groups, and collaboration in policy and programme design.
He further said they discussed deeper engagement in technology-driven parliamentary innovation, including AI-enabled systems, real-time multilingual translation, and capacity building through PRIDE.
“Just concluded a cordial and engaging exchange with Dr. Jagath Wickramaratne, MP, Speaker of the Parliament of Sri Lanka. Recalled our earlier interactions and the strong, time-tested bonds between India and Sri Lanka, rooted in close friendship, mutual support, and shared democratic traditions. Our discussions highlighted close Parliament-to-Parliament cooperation, including regular exchanges, formation of friendship groups, and collaboration in policy and programme design. We discussed deeper engagement in technology-driven parliamentary innovation, including AI-enabled systems, real-time multilingual translation, and capacity building through PRIDE. Hoped that the strong people-to-people connect, cultural linkages including Bodh Gaya as a shared pilgrimage centre, and continued parliamentary dialogue will further strengthen India–Sri Lanka relations in the years ahead,” he added in a post on ‘X’.
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