Sri Lankan officials will attend a virtual meeting of a new sovereign debt roundtable led by the IMF, World Bank and India.
Ceyla Pazarbasioglu, director of the IMF's Strategy, Policy and Review Department, told reporters that the Global Sovereign Debt Roundtable does not intend to discuss country-specific debt restructuring issues, but to address some of the broader impediments that have been delaying such relief, Reuters reports.
The panel, organized by the IMF, the World Bank and India, this year's leader of the Group of 20 major economies, is due to hold its first virtual meeting on Friday, Feb 17. This will be followed by an in-person meeting on Feb. 25 on the sidelines of a G20 finance leaders meeting in Bengaluru, India.
The roundtable will include officials from countries that have requested debt treatments under the Group of 20 common framework – Ethiopia, Zambia and Ghana – as well as middle-income countries such as Sri Lanka, Suriname and Ecuador, which have faced their own debt crises,
Participants include officials from creditor countries China, India, Saudi Arabia, the United States and other wealthy Group of Seven democracies.
Pazarbasioglu said the roundtable also will include the Paris Club of official creditors, the Institute of International Finance, the International Capital Markets Association and other private sector creditors that she declined to identify.
In May, 2022 the country defaulted on its international debt and became the first country in the Asia-Pacific to default on its debt in decades. The country is currently seeking to restructure debts of more than $50bn it owes to foreign creditors.
Sri Lanka’s economic crisis has been driven by disastrous mismanagement of the economy which has seen trust amongst investors and the island’s credit rating plummet. In a bid to preserve the country’s dwindling foreign reserves, Sri Lanka doubled down imposing severe trade restrictions on essential goods including essential goods such as turmeric. This was paired with disastrous tax cuts that saw tax receipts plummet by a quarter and the budget deficit rising to 14% of GDP. Two-thirds of government revenue now go towards paying off interest payments.
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