Sri Lanka ‘definitely on the path to success’ says IMF Managing Director

 Ahead of historic visit to Sri Lanka, IMF Managing Director Dr. Kristalina Georgieva expresses confidence in economic turnaround and assures continuous support to prosperous future

 Notes SL’s recovery still in its early stages and remains fragile, hence need to focus on reforms and build more resilient country

 Clarifies IMF programs are not rigid—it can and will be adapted to the new reality post-Ditwah

 Expresses deep respect for and solidarity with people of Sri Lanka for their resilience in the face of adversity  

By Nisthar Cassim

Dr. Kristalina Georgieva

International Monetary Fund (IMF) Managing Director Dr. Kristalina Georgieva yesterday declared that Sri Lanka is “definitely on the path to success” and expressed support for the country’s journey towards a more stable, inclusive, and prosperous future.

“I come in solidarity with the Sri Lankan people who have demonstrated remarkable resilience in the face of the many challenges from recent years,” Dr. Georgieva told the Daily FT in an exclusive interview ahead of her historic visit to Sri Lanka later today. In what is billed as the first IMF Managing Director to visit Sri Lanka, she will be in the country till Wednesday.

“I express my deep respect for and solidarity with the people of Sri Lanka. Your resilience in the face of adversity has been truly inspiring. Today, thanks to the sacrifices of the Sri Lankan people and reforms by successive Governments, the picture is much more positive,” she added.

During her visit, Dr. Georgieva will engage with authorities and stakeholders, witness first-hand the impact of Cyclone Ditwah, and discuss how the IMF can support recovery and help rebuild a stronger future for Sri Lanka. 

In a wide-ranging interview, the IMF Managing Director acknowledged that Sri Lanka’s economy is recovering and described the 5% growth in 2024 and the estimated 5% in 2025 as a “remarkable rebound.” She also noted that inflation has fallen to close to 2%, foreign reserves have been rebuilt, and tax revenue has outperformed expectations.

“These are strong signs of stabilisation,” said Dr. Georgieva, adding that Sri Lanka has also implemented important reforms in addition to significant progress on debt restructuring. “While it is too soon to declare ‘mission accomplished,’ Sri Lanka is definitely on the path to success,” emphasised the IMF Managing Director.

However, she cautioned that the recovery is still in its early stages and remains fragile. “This is why we urge Sri Lanka to remain focused on reforms in the months ahead,” said Dr. Georgieva, a Bulgarian national and appointed as IMF Managing Director in October 2019.

She pointed out that as Sri Lanka rebuilds, it has the opportunity to not only restore what was damaged but also build a more resilient Sri Lanka. This requires overcoming three main challenges – resources, prioritising support for the most vulnerable, and the importance of incorporating natural disaster resilience into rebuilding efforts.

“Preparedness is key. We often say, ‘fix the roof while the sun is shining,’ which means continue building financial and policy buffers now, while things are improving. As Sri Lanka is beginning to see some sunlight after the storm, the IMF will continue to support its rebuilding efforts,” she said.

Commenting on the $ 3 billion Extended Fund Facility (EFF) support to Sri Lanka, Dr. Georgieva said IMF programs are designed to be flexible when circumstances change. “Sri Lanka’s arrangement with the IMF under the EFF is not rigid—it can and will be adapted to the new reality post-Ditwah,” she emphasised.

With the Government’s strong commitment to the program’s objectives, the IMF Managing Director stressed that economic turnaround is irreversible and progress will continue. “Sri Lanka can count on our support on this journey,” Dr. Georgieva said.

“We are fully committed to helping Sri Lanka through the aftermath of Cyclone Ditwah and to supporting the country’s broader goal of building a strong and prosperous economy,” she added.

Via its Rapid Financing Instrument (RFI), the IMF last month released $ 206 million as emergency support to help address payments and financial hardships caused by Cyclone Ditwah. Since March 2023, under the EFF program, Sri Lanka has received support worth $ 1.74 billion, whilst a further $ 347 million is due upon completion of the Executive Board review.

See full interview on Page 11