COLOMBO: Sri Lanka’s painful austerity measures have “borne fruit” and have to be sustained, the International Monetary Fund stated on Friday (October 4) because the nation’s new president sought modifications to the $2.9 billion bailout of {dollars}.
Leftist chief Anura Kumara Dissanayake received final month’s presidential election by promising to reverse steep tax hikes, increase civil servants’ salaries and renegotiate an unpopular IMF bailout secured by Colombo final 12 months.
But analysts say Dissanayake has little room to reshape the phrases of the take care of the IMF.
The avowed Marxist held talks with representatives of the International Monetary Fund for the second consecutive day on Friday, his workplace stated in an announcement.
“President Dissanayake goals to realize the targets of this system in collaboration with the International Monetary Fund, looking for various approaches that may ease the burden on residents,” he stated.
In his first assembly with the IMF delegation on Thursday, Dissanayake stated he needed to cut back the tax burden on low-income households.
In response, the Washington-based lender confused that it was vital to not jeopardize Sri Lanka’s hard-won financial restoration.
“Reform efforts are bearing fruit by way of reviving financial progress, decreasing inflation, growing reserves and bettering income mobilization,” spokeswoman Julie Kozack stated in Washington.
“Major vulnerabilities and uncertainties stay, which means it’s vital to maintain reform momentum.”
IMF Asia Pacific director Krishna Srinivasan referred to as the talks “productive” and centered on sustaining “hard-won good points.”
Sri Lanka can solely draw a fourth tranche of $336 million if the lender is glad that leaders persist with the bailout’s income and spending targets.
