## IMF Staff Concludes Virtual Mission to Sri Lanka

_IMF News, May 26, 2022_

## Source details

**Canonical URL:** [IMF Staff Concludes Virtual Mission to Sri Lanka](https://www.imf.org/en/news/articles/2022/05/26/pr22171-imf-staff-concludes-virtual-mission-to-sri-lanka)

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## Bibliographic details
- Published: May 26, 2022

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### Mission overview
- Press Release No. 22/171
- Mission dates: May 9-24
- End-of-Mission press release date: May 26, 2022
- IMF team leaders: Mr. Peter Breuer and Mr. Masahiro Nozaki
- Principal Sri Lankan interlocutors: Honorable Prime Minister Ranil Wickremesinghe (concluding meeting), Governor Nandalal Weerasinghe (Central Bank of Sri Lanka), Secretary to the Treasury Mahinda Siriwardana
- Other engagements: representatives of the private sector, the financial sector, and development partners

### Economic assessment — key findings
- Sri Lanka is facing difficult economic conditions and severe balance of payments problems.
- Recent economic indicators suggest that economic activities have been negatively affected by fuel and power shortages.
- Rising global food and oil prices have further added to the balance of payments pressures.
- Inflation has accelerated, driven by shortages of goods, fuel price increases, and currency depreciation.
- The IMF team expressed deep concern about the impact of the ongoing crisis on the people, particularly the poor and vulnerable groups.
- IMF staff assessment: Sri Lanka’s public debt is assessed as unsustainable.

### Policy discussions and identified priorities
- The IMF team held technical discussions on a comprehensive reform package to restore macroeconomic stability and debt sustainability.
- Discussions focused on:
  - Restoring fiscal sustainability while protecting the vulnerable and poor.
  - Ensuring credibility of the monetary policy and exchange rate regimes.
  - Preserving financial sector stability.
  - Structural reforms to enhance growth and strengthen governance.
- The team made good progress in assessing the economic situation and in identifying policy priorities to be taken going forward.
- The team expects these discussions will help the authorities formulate their reform program.

### Debt sustainability and creditor engagement
- The team welcomed the appointment of financial and legal advisors to engage in a collaborative dialogue with Sri Lanka’s creditors as an important step towards restoring public debt sustainability.
- Because public debt is assessed as unsustainable, approval by the Executive Board of an IMF-supported program for Sri Lanka would require adequate assurances that debt sustainability will be restored.

### Next steps and IMF commitments
- IMF staff will continue to monitor the economic and political situation very closely.
- IMF staff will engage with the authorities to formulate concrete measures under an IMF-supported program.
- IMF staff will engage with broader stakeholders to support a timely resolution of the crisis.
- The IMF reaffirmed its commitment to support Sri Lanka at this difficult time, in line with the IMF’s policies.
- Staff expressed gratitude to the authorities for their constructive engagement and support during the mission.

### Contact (from release)
- IMF Communications Department, MEDIA RELATIONS, PRESS OFFICER: Ting Yan
- Phone: +1 202 623-7100
- Email: MEDIA@IMF.org
- Twitter: @IMFSpokesperson

*IMF Staff Concludes Virtual Mission to Sri Lanka — Press Release No. 22/171 (May 26, 2022).*

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## References

- [Sri Lanka and the IMF](http://www.imf.org/external/country/LKA/index.htm)
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- [PRESS CENTER](http://presscenter.imf.org/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2022/05/26/pr22171-imf-staff-concludes-virtual-mission-to-sri-lanka_