📈 Sajith Urges Govt. to Negotiate Successor IMF Program Amid Economic Risks

Opposition Leader Sajith Premadasa has called on the NPP Government to utilize its "demonstrated reforms credibility" to negotiate a follow-up package with the IMF to mitigate external shocks from the Middle East conflict. • Current Status & Targets: Sri Lanka holds US$ 7.0 Bn in gross official reserves but faces an IMF target of US$ 14.2 Bn by March 2027 when the current EFF program ends. To bridge the gap, the country needs to accumulate US$ 600 million monthly, which is currently off track. • Macroeconomic Pressures: The rupee has weakened by 4.5% year-to-date (as of May 15) due to the regional conflict, high oil prices, and a strong US dollar. Fuel costs have risen, with petrol at Rs. 410 per litre. • External Sector Risks: National economic stability remains highly vulnerable as US$ 8.1 Bn in annual remittances heavily depend on employment in Gulf States, which face regional instability. • IMF Response: The IMF and the Government are already discussing adjustments to the current EFF program to handle global supply shocks. The IMF warns of severe global economic risks if oil prices stay above US$ 100 per barrel, projecting that over a dozen nations may require new IMF programs. Premadasa stressed that Sri Lanka must negotiate from its current position of relative strength before reserves deplete, breaking the historical cycle of entering IMF programs only during full-blown crises.