Sri Lanka plans to discuss ways to attract foreign investors with the International Monetary Fund (IMF), President Anura Kumara Dissanayake announced on Monday. This move comes as the country recovers from a severe financial crisis.
The crisis was triggered by a record shortage of foreign currency. Sri Lanka’s recovery has been supported by a $2.9 billion bailout from the IMF. Since March 2023, the country has worked to reduce inflation, rebuild its reserves, and stabilize its currency.
Despite a 5% economic growth last year, Dissanayake said Sri Lanka still needs deeper reforms. These include fixing loss-making state companies and reducing the size of the public sector.
He said, “To ensure sustainable growth, we will offer incentives to attract foreign investment and will hold discussions with the IMF on this matter.” However, he did not specify when these talks would take place.
Sri Lanka defaulted on its foreign debt in 2022 during the crisis. It is now close to finalizing a $22.5 billion debt restructuring plan with IMF support.
Last week, the government raised power prices by 15% to help secure IMF approval for the next $334 million loan tranche.
IMF’s first deputy managing director, Gita Gopinath, warned that Sri Lanka faces risks like tariffs, geopolitical tensions, and economic fragmentation. She stressed the importance of avoiding policy mistakes, noting that half of Sri Lanka’s previous IMF programs ended early due to reform fatigue.
Sri Lanka also began talks with the United States after Washington imposed a 44% tariff on its $3 billion exports in April. These tariffs were later suspended.
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