County has stabilized under IMF deal, sustainable growth next: President

ECONOMYNEXT –Sri Lanka has seen good results under the International Monetary Fund program, but the country has to complete debt restructuring and continue on a reform path to ensure strong growth, President Ranil Wickremesinghe said.

“A lot of good results (sadaneeya prathilaba resak) are coming from the IMF programme,” President Wickremesinghe said. “An appreciating rupee has brought down prices of imported goods, including milk powder and gas. The falling interest rates are benefiting businesses.”

“Going beyond stability now we have to get on a sustainably path.”

“We are not paying all debt now, we have to start paying. For that we need to increase state revenues and our foreign reserves. We have to optimise our resources.”

“We have to do debt restructuring. We are drafting MoUs with official creditors including the Paris Club, the Official Creditors Committee (OCC), and China Exim Bank separately.

“Bond holders and Lazard are joining these discussions. We hope to finish by the middle of this year.” France-based Lazard as financial advisor and Clifford Chance LLP as legal advisor are supporting the country on debt restructuring.

The point of the debt restructuring was to reduce the country’s loan payments to 95 percent of the gross domestic product, from 125 percent, maintain the government’s gross financial requirement at 13 percent annually and ensure foreign debt servicing remains below 4.5 percent annually, President Wickremesinghe said. “We have to work towards this. If we meet these goals we won’t fall back into disaster.”

President Wickremesinghe said Sri Lanka needed to pay back its loans, and get new loans. “Then we have to boost exports and modernize agriculture.”

President Wickremesinghe said the government cannot give a salary increase to state workers this year although many had requested it. “In the past by being irresponsible in this regard we destroyed our economy and people’s livelihoods. We can consider an increment only next year, that is the truth. If we exit this path, we will head back into disaster.”