The IMF has approved the third review of Sri Lanka's $2.9 billion bailout, releasing $333 million in funding. While signs of economic recovery emerge, the country still faces critical debt restructuring challenges to move forward with the programme.
The International Monetary Fund (IMF) approved the third review of Sri Lanka's $2.9 billion bailout on Saturday but warned that the South Asian economy remains vulnerable. In a statement, the global lender confirmed it would release approximately $333 million, bringing the total funding to around $1.3 billion, as signs of an economic recovery emerge.
However, Sri Lanka must still complete a $12.5 billion bondholder debt restructuring and a $10 billion debt rework with bilateral creditors, including Japan, China, and India, to progress with the programme, according to the IMF. The bailout, secured in March of the previous year, helped stabilise the economy after Sri Lanka plunged into its worst financial crisis in over seven decades in 2022.
Maintaining tax revenue and continuing reforms of state-owned enterprises will be critical in achieving the primary surplus target of 2.3% of GDP next year, said IMF Senior Mission Chief Peter Breuer, concluding his delegation’s visit to the capital, Colombo. "The authorities have committed to staying within the guardrails of the programme," Breuer stated. "We have agreed on a package for them to achieve their priorities and objectives and, as soon as that is submitted to parliament, the fourth review process will proceed."
Sri Lanka's new president, Anura Kumara Dissanayake, announced this week that an interim budget would be presented to parliament in December. He hopes to complete the debt restructuring by the end of December.
During the crisis, a severe dollar shortage sent inflation soaring to 70%, the currency plummeted to record lows, and the economy contracted by 7.3% at its worst, followed by a 2.3% decline last year. Recently, the rupee has risen by 11.3%, and inflation has disappeared, with prices falling by 0.8% last month.
The World Bank forecasts Sri Lanka’s economy will grow by 4.4% this year, marking the first increase in three years.
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The International Monetary Fund (IMF) is reviewing Sri Lanka’s request for approximately $200 million in emergency financing after Cyclone Ditwah caused widespread destruction across the island nation.
Cyclone-induced landslides and floods cut off roads across western Indonesia on Monday as improved weather revealed the growing scale of a disaster that has killed nearly 800 people across Southeast Asia.
Rescuers in Sri Lanka were scrambling on Monday to clear roads and deliver aid to more than half a million people hit by a cyclone last week, as the death toll climbed to 355, with 366 missing, official figures showed.
The death toll from devastating floods across Southeast Asia climbed to at least 183 people on Friday (28 November). Authorities in Indonesia, Malaysia, Thailand and Sri Lanka struggle to rescue stranded residents, restore power and communications, and deliver aid to cut-off communities.
The death toll from Hong Kong’s deadliest fire in decades has risen to 161, after forensic analysis confirmed one more victim among the charred remains at Wang Fuk Court in Tai Po, more than three weeks after the blaze began, authorities said on Saturday.
Israeli Prime Minister Benjamin Netanyahu is set to meet President Donald Trump on 29 December in Florida, where he is expected to present a package of military options regarding Iran, Israel’s public broadcaster KAN reported on Saturday.
US intelligence assessments indicate that Russian President Vladimir Putin continues to seek full control of Ukraine and to expand Russia’s influence in parts of Europe formerly under Soviet rule, contradicting repeated claims that Moscow poses no threat to the continent.
The United States has proposed a potential new format for peace talks between Ukraine and Russia, which could include American and European representatives, Ukrainian President Volodymyr Zelenskyy said on Saturday, December 20.
The United States seized a second merchant vessel carrying oil off the coast of Venezuela in international waters on Saturday, as part of Washington’s sanctions enforcement campaign, according to the Department of Homeland Security.
Warner Bros Discovery’s board rejected Paramount Skydance’s $108.4 billion hostile bid on Wednesday (17 December), citing insufficient financing guarantees.
Ford Motor Company said on Monday it will take a $19.5 billion writedown and scrap several electric vehicle (EV) models, marking a major retreat from its battery-powered ambitions amid declining EV demand and changes under the Trump administration.
Iran has rolled out changes to how fuel is priced at the pump. The move is aimed at managing demand without triggering public anger.
U.S. stock markets closed lower at the end of the week, as investors continued to rotate out of technology shares, putting pressure on major indices.
The U.S. Federal Reserve’s Federal Open Market Committee (FOMC) cut its benchmark interest rate by 25 basis points to a range of 3.50% to 3.75% following its two-day policy meeting, according to an official statement issued on Wednesday, 10 December.
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