IMF team to visit Sri Lanka to assess Cyclone Ditwah impact, review program path

Sri Lanka
By Editor_1

COLOMBO – A team from the International Monetary Fund (IMF) will visit Sri Lanka from January 22 to 28 to assess the economic impact of Cyclone Ditwah, with findings expected to inform discussions on the next phase of the IMF-supported program, IMF officials said.

“The findings of the mission will feed into subsequent discussions on the IMF-supported program,” IMF Mission Chief for Sri Lanka Evan Papageorgiou said in a statement.

He said the visit underscores the IMF’s commitment to supporting Sri Lanka as it addresses both the economic and humanitarian challenges arising from the recent cyclone.

During the visit, the IMF team is expected to hold discussions with government officials and other relevant stakeholders to assess the cyclone’s impact on infrastructure, livelihoods and overall economic stability.

“The IMF team will explore how it can best assist Sri Lanka in its recovery efforts, including by resuming the Extended Fund Facility (EFF)-supported program and providing policy advice and technical assistance to promote resilience and sustainable growth,” Papageorgiou said.

Sri Lanka has yet to complete the fifth review of its IMF program, despite having met or exceeded several quantitative targets. The review was delayed after the government expanded its budget framework by approximately LKR 500 billion, which affected agreed fiscal targets underpinning the program.

The IMF has made a preliminary assessment that Cyclone Ditwah could reduce Sri Lanka’s gross domestic product (GDP) by around 0.2%, reflecting damage to infrastructure, disruptions to economic activity and losses to livelihoods.

Sri Lanka has been attempting to recover lost output following a series of economic shocks in recent years, including balance-of-payments pressures, currency depreciation and high inflation. While growth has recently picked up as the economy stabilizes, authorities continue to face challenges in maintaining macroeconomic stability while supporting recovery and reconstruction efforts.

-ENCL

Editor_1
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