Sri Lanka’s economy, which has been hit by a crisis, is expected to resume growth in 2024 after a 3% decline this year, according to an International Monetary Fund (IMF) official on Monday. Next year’s 1.5% growth will be highly dependent on Sri Lanka’s agreement to undertake an economic reform program, including difficult reforms in five identified areas.
Sri Lanka nearly depleted its foreign exchange reserves last year, and as a result, declared a moratorium on repaying foreign loans. This crisis led to severe shortages of essentials such as medicines, fuel, cooking gas, and food, which resulted in angry protests and forced then-President Gotabaya Rajapaksa to flee the country and resign.
In March, the IMF approved a four-year rescue program of about $3 billion. The authorities are currently discussing debt restructuring with foreign creditors. An IMF team led by Peter Breuer is presently in Sri Lanka to hold talks with officials ahead of the first review of the program later this year.