Sri Lankan President Ranil Wickremesinghe has labelled reopening negotiations with the International Monetary Fund (IMF) over a bailout as the “biggest threat” to the nation’s economy. Speaking ahead of a critical election, Wickremesinghe, who brokered a $3 billion IMF loan, argued that renegotiating the deal could derail financial stability and halt funding. The 2022 bailout introduced austerity measures and tax hikes, which hurt the president’s popularity.
Economic stability was a central theme of Wickremesinghe’s campaign, highlighting his role in restructuring debt with creditors like China. Competing against leftist politician Anura Kumara Dissanayake and opposition leader Sajith Premadasa, he faces promises from both contenders to renegotiate the IMF deal for relief from rising costs post-bailout.
Investors warn that renegotiation poses risks to the economy and financial markets, pointing to a recent slump in Sri Lankan stocks and bonds. Despite this, the IMF has expressed openness to different strategies for achieving its targets, as long as they are realistic and timely.
Wickremesinghe underscored the need for the IMF and other lenders to be more sensitive to distressed nations, advocating for a systemic overhaul that gives developing countries greater influence. While the IMF stands firm on the original agreement, it remains willing to consider new proposals.
Addressing broader geopolitical issues, Wickremesinghe acknowledged the advantages and disadvantages of regional competition between major powers like the US and China. He expressed a desire for more competitive projects from these countries rather than being forced to choose sides.
Wickremesinghe’s comments reflect his focus on economic stability and measured governance ahead of the election, emphasizing the macroeconomic frameworks he has established since taking office amid crisis.
Original Story https://www.livemint.com/news/sri-lanka-president-says-upending-imf-deal-is-major-threat-11727043551948.html
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