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IMF: Sri Lanka's crisis-hit economy likely to resume growth in 2024 after contracting 3% this year

The International Monetary Fund says Sri Lanka’s crisis-hit economy is expected to resume growing in 2024 after contracting 3% this year

Krishan Francis
Monday 15 May 2023 16:33 BST

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Sri Lanka’s crisis-hit economy is expected to resume growing in 2024 after contracting 3% this year, an International Monetary Fund official said Monday.

Krishna Srinivasan, the IMF's director for Asia and Pacific, said expected economic growth of 1.5% next year hinges critically on the economic reform program Sri Lanka has agreed to undertake, including challenging reforms in five identified areas.

“It is now essential to continue the reform momentum under strong ownership by the authorities and the Sri Lankan people, more broadly,” he said.

Sri Lanka nearly exhausted its foreign currency holdings last year and the island nation announced that it was suspending repayment of foreign loans.

The crisis resulted in severe shortages of essentials such as medicines, fuel, cooking gas and food, leading to angry protests that forced then-President Gotabaya Rajapaksa to flee the country and resign.

The IMF approved a nearly $3 billion rescue program in March which will run for four years. Authorities are now discussing debt restructuring with foreign creditors.

An IMF team headed by Peter Breuer is currently visiting Sri Lanka for discussions with officials ahead of the program's first review later this year.

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