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Sri Lanka facing 'solvency' issues due to unsustainable debt levels: IMF

A summary of the IMF report released earlier in the month said Sri Lanka faced unsustainable debt levels and needed a 'credible and coherent' strategy to restore stability

Sri Lanka
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A boy holds empty containers as he waits with his family members to buy kerosene oil for kerosene cookers amid a shortage of domestic gas due to country's economic crisis, at a fuel station in Colombo (Photo: Reuters)

Eric Martin, Asantha Sirimanne and Anusha Ondaatjie | Bloomberg
Sri Lanka faces “solvency” issues because of risks stemming from unsustainable debt levels that jeopardise the nation’s economy, according to International Monetary Fund staff.

“Based on staff analysis, the fiscal consolidation necessary to bring debt down to safe levels would require excessive adjustment over the coming years, pointing to a clear solvency problem,” the IMF said in its Article IV consultation report, released Friday in Washington.

The full report provides further analysis of the South Asian island nation’s debt and finances. A summary of the report released earlier in the month said Sri Lanka faced unsustainable debt levels and needed

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First Published: Mar 26 2022 | 10:12 AM IST

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