Thread by @advocatalk

✅The IMF Executive Board has approved #LK's 17th IMF program, under the Extended Fund Facility (EFF). However, this is only the beginning.

Here is a 🧵about what this means for 🇱🇰 and what happens next. 1/6

#EconomicCrisisLK #IMF #SriLanka #Reforms

https://twitter.com/KGeorgieva/status/1637871467294769154

🏦The EFF aims to provide assistance to countries experiencing serious balance of payments imbalances because of structural impediments, or slow growth. It provides support for comprehensive programs with policies needed to correct structural imbalances over a longer period. 2/6

🚫What it is not? The #IMF program is not a bailout. With an IMF program comes credibility and it aims to bring back confidence in 🇱🇰's economy giving #LK access to bilateral, multilateral and financial markets. However, it does not solve all 🇱🇰's economic woes. 3/6

💵What happens now? Upon approval of the #EFF by the #ExecutiveBoard, the first tranche of around US $ 333 mn will be disbursed. Further, with the issuing of the Letter of Intent with 🇱🇰, the Debt Sustainability Analysis and the conditions of the program will be made public. 4/6

🎯Disbursement of the balance will be over approx. 4 yrs and will be conditional on 🇱🇰 meeting predetermined targets. It is important that #LK goes beyond the macroeconomic targets to meet structural reform targets to prevent another failed program, 5/6 imf.org/en/News/Articl…

📈However, the #IMFprogram is just the first step and at best will stabilize the economy. If 🇱🇰 is to avoid falling into the ♻️cycle of default and move from recovery to growth, we must take the initiative to carry out the necessary #reforms going beyond the scope of the program.