IMF approves third review Lanka’s $2.9b rescue

Al Jazeera :

The International Monetary Fund (IMF) has approved the third review of Sri Lanka’s $2.9bn bailout but warned that the South Asian island nation’s economy remains vulnerable.
The global lender said on Saturday that it would release about $333m, bringing total funding to $1.3bn, to the crisis-hit nation. Signs of an economic recovery were emerging, it said.
Sri Lanka still needs to complete a $12.5bn bondholder debt restructuring and a $10bn 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 the cash-strapped country plunged into its worst financial crisis in more than seven decades in 2022.
Reporting from the capital, Colombo, Al Jazeera’s Minelle Fernandez said the IMF seemed happy with the pace the government has been keeping and the economy “has stabilised from those dark days of 2022 with no money for fuel, food, medicine, energy”.
The shortage of foreign exchange, which left the country unable to finance even the most essential imports of food and fuel, led to months of mass street protests and forced then-President Gotabaya Rajapaksa to resign.
“Keeping things stable in order to shore up reserves, in order to make sure there’s a stable supply of basic necessities, all of those things will be facilitated by this cash infusion that the Sri Lankan government gets,” according to Fernandez.
Staying in line with tax revenue requirements and continuing reforms of state-owned enterprises will remain crucial to hitting a primary surplus target of 2.3 percent.