Colombo, June 17 — Gita Gopinath, First Deputy Managing Director of the International Monetary Fund (IMF), praised Sri Lanka’s “remarkable progress” in economic recovery following its historic 2022 debt default, while urging the nation to remain committed to reforms to prevent repeating past mistakes.
Speaking at a high-profile conference at the Shangri-La Hotel in Colombo, Gopinath said the island’s crisis — triggered by years of economic mismanagement, falling revenues, and unsustainable debt — had led to extraordinary hardship. But through tough reforms, Sri Lanka had turned a corner.
“Today, thanks to bold reforms and the commitment of the Sri Lankan people, substantial progress has been made to restore macroeconomic stability,” she said. “Inflation has been brought under control, fuel and medicines are available, and growth has returned—expanding by 5 percent in 2024.”
Gopinath highlighted key achievements under Sri Lanka’s IMF-supported reform program, including a 67% increase in tax revenue relative to GDP, enhanced governance with new anti-corruption and central bank laws, and a historic debt restructuring deal that saw $3 billion in external debt forgiven and $25 billion restructured.
She emphasized that Sri Lanka’s experience offers vital lessons for other nations facing debt crises, noting that the country’s approach has helped improve global debt restructuring methodologies, inspired coordination among creditors, and contributed to new instruments and IMF reforms.
However, she warned against complacency.
“This time must be different,” she said, echoing Sri Lankan President Dissanayake’s aspiration that this should be the last IMF program the country needs. “Of the 16 IMF programs Sri Lanka has undertaken, about half ended prematurely. The nation cannot afford to fall back into that cycle.”
With poverty still at 24.5% and domestic debt high, Gopinath stressed that sustained, inclusive reform—especially tackling corruption and ensuring fiscal discipline—is vital.
“There is no room for policy errors. The choice is between reform and regret,” she cautioned, adding that ongoing public engagement and transparency will be crucial to build trust and ensure lasting change.
“The IMF will remain a steadfast partner,” Gopinath assured, calling for continued resilience and unity. “Let this be the last crisis of its kind for Sri Lanka. The country has shown it can rise. Now, it must stay the course.”