Sri Lankan economy expected to contract by 3% in 2023: IMF official

By Uditha Jayasinghe

COLOMBO (Reuters) – The Sri Lankan economy is expected to contract by 3% in 2023 given the weak external environment, Krishna Srinivasan, Director of the Asia Pacific Department at the International Monetary Fund, said on Monday.

An IMF team is in Colombo as part of regular consultations ahead of the first review mission later this year. The team met with multiple officials including President Ranil Wickremesinghe, who is also the finance minister.

Sri Lanka, with the help of a $2.9 billion bailout from the global lender, is trying to steer out of its worst financial crisis since gaining independence in 1948 and turn around its battered economy.

The island nation defaulted on its foreign debt last April.

Sri Lankan authorities formally presented a request for debt treatment in the first meeting of the official bilateral creditors committee, which include India and Paris Club members earlier this month. China, which is the island’s largest bilateral lender, participated as an observer.