Five key points from President’s “Good News”
President Ranil Wickremesinghe delivered a special statement to the nation today, highlighting Sri Lanka’s success in reaching final agreements to restructure debt with its bilateral creditors, including the Official Creditor Committee (OCC) and the Export-Import Bank of China.
The total value of debt restructuring agreements that Sri Lanka reached today with creditor nations is US$ 10 billion, which will provide up to 92% relief on debt repayments during the International Monetary Fund’s (IMF) EFF program.
Addressing the nation, President Ranil Wickremesinghe announced that today marks a significant milestone in the recent history of Sri Lanka, as the country has successfully reached a final agreement with its official bilateral creditors.
Following are five key points from the President’s special address to the nation;
Today, debt restructuring agreements were finalized with Sri Lanka’s official creditors in Paris and with the Chinese Exim Bank in Beijing. This development is a significant milestone, bringing good news to all who cherish the country.
Debt restructuring agreements will postpone all bilateral loan payments to foreign countries until 2028. Additionally, Sri Lanka will have until 2043 to repay these loans on concessional terms.
Following Sri Lanka’s official declaration of its inability to repay loans, all transactions and foreign-funded development projects were suspended. The successful debt restructuring now paves the way to resume these projects and transactions.
After six consecutive quarters of economic contraction, Sri Lanka’s economy began to grow again from the third quarter of 2023. The country’s foreign reserves, which depleted to a critical low by April 2022, have now rebounded to $5.5 billion.
In 2022, Sri Lanka allocated 9.2% of its GDP to foreign debt payments. However, with ongoing efforts, this percentage is expected to decrease to less than 4.5% between 2027 and 2032, reflecting significant fiscal improvement.
2024-06-26
