Sri Lanka needs to finalize deals with creditors ahead of second review in June: IMF

Colombo [Sri Lanka], December 13 : International Monetary Fund (Peter Breuer has said the country needs to enter into agreements with its official and private creditors before the second review of the Extended Fund Facility (EFF), which is expected to be concluded by the end of the first half of next year, Daily Mirror reported.
Daily Mirror is a daily English-language newspaper published in Colombo, Sri Lanka.
Breuer said the agreements that have been entered with creditors in-principle need to be converted into real agreements before the second review.
The IMF team is scheduled to visit Colombo from March-April next year and is expected to finish the second review by June.
Sri Lanka has entered into in-principle debt restructuring deals with the Official Creditor Committee (OCC) led by France, China and India and also with Exim Bank of China.
However, Sri Lanka is yet to strike a deal with its commercial creditors or bondholders. An initial proposal involving restructuring debt linked to GDP growth by the bondholders was rejected by the Sri Lankan authorities, as per Daily Mirror.
In September, the IMF said that despite early signs of stabilisation, full economic recovery in Sri Lanka is not yet assured.
Growth momentum remains subdued, with real GDP in the second quarter contracting by 3.1 per cent on a year-on-year basis and high-frequency economic indicators continuing to provide mixed signals.
Reserve accumulation has also slowed in recent months, the IMF stated.
An IMF mission team led by Peter Breuer and Katsiaryna Svirydzenka visited Colombo from September 14-27, to discuss economic and financial policies to support the approval of the First Review of the program under the EFF arrangement.
At the end of the mission, Breuer and Svirydzenka said in a statement that Sri Lanka has made commendable progress in implementing reforms, but despite early signs of stabilization, full economic recovery is not yet assured.