Sri Lankan President takes U-turn, prioritizes IMF bailout over renegotiation

Sri Lankan President Anura Kumara Dissanayake supports the continuation of the International Monetary Fund’s (IMF) bailout program. is, and has reversed its pre-election stance to renegotiate its terms.

In his inaugural address to Parliament, Dissanayake emphasized the need to maintain economic stability and ensure adherence to agreements made by the previous administration under Ranil Wickramasinghe.

Dissanayake confirmed plans to finalize a staff-level agreement with the IMF by November 23, which would allow the release of the next $330 million tranche from the $3 billion facility. An IMF team, currently in Sri Lanka, is conducting the third review of the four-year programme.

Debt restructuring agreements, a key IMF requirement, are critical to maintaining debt sustainability. Separate deals with bilateral and private lenders, including a 27 percent haircut on debt and an 11 percent cut in interest rates, are expected to be finalized by the end of the year.

Sri Lanka initially sought help from the IMF in 2022 after defaulting on its $46 billion external debt amid an economic crisis. The bailout, due in March 2023, required major reforms including tax hikes, subsidy cuts and restructuring of state institutions.

President Dissanayake reiterated his government’s commitment to fiscal discipline and inclusive economic growth. Highlighting his party’s historic two-thirds majority in parliament, Dissanayake called for accountability, fairness and public participation in economic recovery efforts.

He announced welfare measures to tackle malnutrition, health care and social care while pledging to protect all citizens.

The parliamentary session also marked a milestone, with first-time members Ashoka Ranwala, Rizvi Saleh, and Himali Weerasekera elected to key leadership roles, reflecting the government’s focus on grassroots reforms. . Speaker Ranwala, a chemical engineer and former trade union leader, represents the rise of the National People’s Power (NPP) Party through decades of grassroots activism.

Dissanayake’s government prioritizes economic stability while addressing immediate challenges, ensuring equitable development, and fostering unity among Sri Lanka’s diverse population.