Sri Lanka PM stresses urgency for economic reform plan

COLOMBO, Sri Lanka (AP) — Sri Lanka's prime minister said Thursday that he will quickly prepare an economic reform program and seek approval from the International Monetary Fund — because global inflation and the financial impact of Russia's invasion of Ukraine on other countries could limit their ability to help the island nation.

Prime Minister Ranil Wickremesinghe said that officials have reached agreement on basic reforms concepts with the IMF and that he plans to have the economic reform program ready within two weeks. After it is finalized, an IMF delegation will visit Sri Lanka to evaluate the program.

“I have placed my special attention on this because of the present global situation, the war in Ukraine and global inflation. From what we can see a number of countries may have to face economic problems like ours,” Wickremesinghe said.

He added: “At the moment the United States and the Europe are spending a lot on the war and there is a possibility of the aid given to us being reduced."

Sri Lanka is nearly bankrupt with an acute foreign currency crisis that resulted in a foreign debt default. The country announced last month that it is suspending nearly $ 7 billion foreign debt repayment due for this year out of about $25 billion due through 2026. Sri Lanka's total foreign debt stands at $51 billion.

The IMF said in a statement Thursday said that a team remotely concluded initial discussions about Sri Lanka's reform plan on Tuesday.

“The team made good progress in assessing the economic situation and in identifying policy priorities to be taken going forward,” the statement said.

The statement added that discussions focused on restoring fiscal sustainability while protecting the vulnerable and poor; ensuring monetary policy credibility and exchange rate...