Colombo: Sri Lankan President Ranil Wickremesinghe on Monday expressed hope that the debt restructuring talks with India and China would be successful as the cris-hit island nation attempts to close a much-needed bailout package deal with the IMF.
Sri Lanka held talks with the International Monetary Fund (IMF) on October 16 on the release of a $2.9 billion rescue package by the Fund, the completion of which hinged on assurances from the country's creditors on debt restructuring.
Sri Lanka has large debt rollover volumes (Gross Financing Need) running up to 37 per cent of GDP in 2022, which the IMF wants to bring down.
Delivering his 2023 budget speech in Parliament in his capacity as the finance minister, Wickremesinghe said the government is talking to creditors, including China and India, to reach an agreement on debt restructuring as asked by the IMF.
"We are confident that a positive outcome will be reached from these talks," he said.
Wickremesinghe said Sri Lanka's economy needed major reforms to wriggle out of the current economic crisis, the worst since 1948.
"The economic reforms proposed by the IMF are primarily for economic stabilisation," he said. Wickremesinghe also said the loss-making state-owned enterprises would be "re-structured" and the proceeds will be used to strengthen foreign reserves.
Sri Lanka, a country of 22 million people, plunged into financial and political turmoil earlier this year as it faced a shortage of foreign currencies. It declared bankruptcy in mid-April and has suspended repaying its $51 billion foreign debt, of which it must repay $28 billion by 2027.