‘No room for policy errors’ - warning to Sri Lanka from IMF

With increasing tariffs, developments in the Middle East, uncertainty around energy prices, Sri Lanka has no room for policy errors, according to a stark warning issued by Dr. Gita Gopinath, the First Deputy Managing Director (FDMD) of the International Monetary Fund (IMF).

According to Dr. Gita Gopinath, a sound fiscal policy will be very critical to make sure Sri Lanka does not return to a crisis.

Addressing the conference on ‘Sri Lanka’s Road to Recovery: Debt and Governance’, jointly co-hosted by the Ministry of Finance, Central Bank of Sri Lanka and the IMF, Dr. Gopinath stated that the IMF will remain a steadfast partner of Sri Lanka and is looking forward to working with stakeholders to improve the lives of all Sri Lankans.

While highlighting Sri Lanka’s decision to engage with the IMF on 16 previous programs, the First Deputy Managing Director of the IMF stated that all factions must work together to ensure that the current IMF program will be the final one that Sri Lanka will require.

She said the IMF is confident that it can be a reality as long as Sri Lanka stays the course.

Earlier, addressing the conference, President Anura Kumara Dissanayake also stated that he hopes to make the current Extended Fund Facility (EFF) program with the IMF, the last such program Sri Lanka will need to undertake with the IMF.

The President noted that by 2028, Sri Lanka hopes to achieve the economic growth and stability necessary to repay its debts through its own means.