COLOMBO, Feb 24 ― Senior US diplomat Richard Verma yesterday met Sri Lankan President Ranil Wickremesinghe and Foreign Minister Ali Sabry in Colombo, and discussed Sri Lanka's economic recovery and progress on its IMF programme, the US State Department said.

Why it is important

The South Asian island nation finalised a US$2.9 billion (RM13.9 billion) bailout from the International Monetary Fund in March 2023, which helped temper skyrocketing inflation, improved state revenue and boosted foreign exchange reserves.

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The country defaulted on its overseas debt in May 2022 after a severe shortage of foreign exchange reserves triggered the worst financial crisis since independence from Britain in 1948.

Sri Lanka has since made progress on about US$11 billion of bilateral debt restructuring and hopes to have agreements in place with all key creditors, including bondholders, by May at the latest, Sabry told Reuters earlier this month.

Key quotes

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The State Department official and the Sri Lankan leaders “discussed progress on Sri Lanka's IMF programme, including economic and governance reforms aimed at putting Sri Lanka on the path to sustainable economic growth,” the department said in a statement.

By the numbers

Sri Lanka's economy is estimated by the World Bank to have contracted by 3.8 per cent last year but is expected to grow by 1.7 per cent in 2024. Sri Lanka's central bank has projected a more optimistic growth of 3 per cent for this year. ― Reuters