Sri Lanka's leftist Prez Dissanayake looking to restart IMF bailout talks 'immediately'

Sri Lanka’s newly elected leftist president said on Wednesday (September 24) that he wanted to “immediately” restart negotiations with the International Monetary Fund (IMF) over a $2.9 billion bailout that threw a lifeline to his bankrupt country, but imposed punishing and unpopular austerity measures.

“We plan to begin negotiations with the International Monetary Fund immediately and proceed with activities related to the extended credit facility,” Anura Kumara Dissanayake said in a televised address

In his 10-minute address, Dissanayake, who was elected just a couple of days ago, laid stress on the need to move quickly in renegotiating the terms of the IMF bailout and advancing debt restructuring efforts.

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“To advance our debt restructuring program, we are negotiating with relevant creditors to expedite the process and secure necessary debt relief,” he said.

He added that he aims to conclude a deal to restructure the country’s international sovereign bonds and secure additional concessions for the struggling economy.

The IMF, which provided a financial lifeline to Sri Lanka during its 2022 economic collapse, expressed readiness to resume discussions with the new government.

“We look forward to working together with President Dissanayake… towards building on the hard-won gains that have helped put Sri Lanka on a path to economic recovery,” an IMF spokesperson said Monday (September 23) from Washington. The spokesperson also confirmed plans to coordinate the third review of the IMF-supported program with the new administration.

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Sri Lanka’s severe economic crisis last year toppled the previous president, but the turmoil has given Dissanayake, a leftist leader, the chance to rise in popularity after vowing to reform the island’s “corrupt” political system.

On Tuesday (September 24), he dissolved the 225-member parliament, in which his party had held just three seats, and called for fresh elections on November 14 in the hopes of bolstering his own supporter base.

With inputs from AFP