The IMF said on Friday that a team will travel to Sri Lanka next week to resume aid talks interrupted by the unrest that led to the country’s president’s resignation.
The island country defaulted on its $51 billion foreign debt in April and is seeking help from the International Monetary Fund after months of food, fuel and medicine shortages.
Amid runaway inflation, the country’s central bank warned on Thursday that the economy could contract a record contraction of more than eight percent this year, with inflation at 65 percent.
Employees of the Washington-based lender plan to visit Colombo from August 24-31 “to continue discussions with the Sri Lankan authorities on economic and financial reforms and policies,” the IMF said in a statement.
“The goal is to make short-term progress towards a staff-level agreement” on a financing package,” the IMF said.
However, the country’s national debt is “unsustainable,” meaning that for any IMF loan program, “Sri Lanka’s creditors would require adequate guarantees that debt sustainability will be restored.”
Formal talks on a new package for the poor nation began in June but were thrown off course by political unrest that now forced ex-President Gotabaya Rajapaksa to flee the country, amid dramatic scenes of protesters occupying the presidential palace.
Rajapaksa is accused of having so badly managed the island’s economy that it has run out of foreign currency to finance even the most essential imports, leading to severe hardship for its 22 million people, with four out of five Sri Lankans taking meals. to skip.
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