Prime Minister trying to fast-track IMF talks – report

Sri Lanka is looking to fast-track talks with the International Monetary Fund and agree on a loan by mid-June so that it can then approach other lenders for urgently needed funds, Bloomberg has reported.

Sri Lanka will slash its budget expenditure to “bare bones” and hopes to break even or post a primary surplus of 1% of gross domestic product by 2025, Prime Minister Ranil Wickremesinghe said in an interview at his office in Colombo Wednesday. Even so, that would be smaller than the 2% surplus the IMF has sought, which could be a sticking point, Bloomberg says.

“We need to find the dollars — the IMF will not bring in the entire thing,” Wickremesinghe said. “But if we start with the IMF, it will be easier for others to help us.”

Secretary to the ministry of finance, Mahinda Siriwardana, said Sri Lanka was waiting for an IMF staff level agreement so that the local authorities can “initiate the work on bridging finance.”

The government was also looking at “all the options to boost revenues,” Siriwardana said in a telephone interview Thursday, declining to elaborate.

Wickremesinghe is seeking a total of about $4 billion this year, from the multilateral lender and creditors including China and Japan, to help pay for food and fuel. Easing the shortages could be the first step to soothe public anger that has stoked inflation to almost 40% and triggered protests seeking the ouster of President Gotabaya Rajapaksa.