IMF bailout not a silver bullet for Sri Lanka, says Moody’s Analytics

© Reuters. FILE PHOTO: Signage is seen outdoors the Moody’s Company headquarters in Manhattan, New York, U.S., November 12, 2021. REUTERS/Andrew Kelly

By Swati Bhat and Uditha Jayasinghe

MUMBAI (Reuters) – Sri Lanka has a troublesome highway forward no matter how a lot funding it receives from multilateral and world monetary businesses, a senior economist at Moody’s (NYSE:) Analytics advised Reuters on Tuesday.

Moody’s Analytics is unbiased of Moody’s Traders Service, the score company. 

The Worldwide Financial Fund (IMF) accredited a virtually $3 billion bailout for Sri Lanka on Monday and the nation’s presidency stated the programme will allow it to entry as much as $7 billion in general funding.

“It (the IMF assist) is certainly not just like the silver bullet they suppose,” stated Katrina Ell, senior economist at Moody’s Analytics.

“The exuberance that has been mirrored within the monetary markets will actually fade except we see some important enhancements from the federal government as additionally in Sri Lanka’s progress prospects”.

The economist stated all extra funding that the nation receives in coming months is sweet information however fiscal prudence and debt sustainability might be key.

“We have to needless to say it is nonetheless going to be a troublesome highway regardless of how a lot potential funds or assist is being thrown at Sri Lanka,” Ell stated.