Sri Lanka’s 2023 Budget needs to be consistent with the economic reforms program and macroeconomic framework under the International Monetary Fund (IMF) program, says Peter Breuer, Chief of the Debt Capital Markets Division, Monetary and Capital Market Department.

IMF staff and the Sri Lankan authorities announced this morning that they have reached a staff-level agreement to support the island nation’s economic policies with a 48-month arrangement under the Extended Fund Facility (EFF) of about USD 2.9 billion.

Mr. Breuer told reporters that the staff-level agreement is a signal of the commitment by the authorities for significant, comprehensive economic reforms package.

Responding to a question, the IMF mission chief said these reforms are a credible device to show to creditors that Sri Lanka is serious about engaging in reforms. It assures creditors that Sri Lanka is doing everything that is needed to restore the payment capacity, he added.

Mr. Breuer also underscored the importance of having a forum where creditors and the debtor can have discussions where the debtor is given the opportunity to explain how they got to the situation and the measures it is taking to overcome the crisis.

Speaking further, he said Sri Lanka will have to continue negotiations with creditors to get the financing assurances to restructure its debt. For this engagement with official creditors and private creditors is of importance, he added.