COLOMBO:  , Sri Lanka’s new leader on Thursday ( Nov 21 ) backed a controversial IMF bailout, marking a U-turn from his election pledge to renegotiate the deal secured by his predecessor.
Anura Kumara Dissanayake, the leftist leader who strengthened his hold on power last week after winning a clout in the government in response to his own triumph in September, vowed to carry on the IMF program.
Sri Lanka requested a rescue deal from the IMF after the nation, in the middle of an unprecedented economic collapse, defaulted on its US$ 46 billion additional bill in April 2022.
Decades of street demonstrations and the country’s inability to funding even the most basic goods of food and fuel were caused by the country’s lack of foreign exchange, which forced then-president Gotabaya Rajapaksa to step down.
Colombo had to drastically raise taxes, eliminate large energy incentives, and agree to rebuild more than 50 loss-making state companies as part of the US$ 2.9 billion product secured early next year.
Dissanayake’s National People’s Power group had said it did not agree with the International Monetary Fund’s debt examination and may revise the loan programme.
But in his first handle to the new parliament, where his party enjoys a two-thirds lot, Dissanayake said the economic recovery was too delicate to take risks.
He said as he ruled out agreements with the IMF or lenders,” the market is in such a condition that it cannot get even the slightest surprise.”
” This is not the time to talk about whether the conditions are favorable to us or not,” he said. He claimed that the operation had taken about two times before it could start over.
The finance department is reportedly speaking with a visiting IMF group in Colombo over the weekend as the delayed next overview of the four-year loan program comes to an end.