IMF welcomes India’s aid to Sri Lanka amid current economic crisis

Even as the world faces economic challenges in the face of various waves of the Covid-19 pandemic, the International Monetary Fund (IMF) has hailed India’s resilient economy while highlighting the structural reforms carried out by the government. in recent years, according to the news agency ANI report.

IMF Managing Director Kristalina Georgieva hailed India’s well-targeted policy mix that has helped India’s economy remain resilient during her meeting with Finance Minister Nirmala Sitharaman. Georgieva highlighted the resilience of India which remains the fastest growing country across the world despite the challenges posed by the Covid-19 pandemic.

Furthermore, the Managing Director of the IMF particularly commended India’s assistance to Sri Lanka in the face of the current economic crisis. Sitharaman called on the IMF to urgently support and provide financial assistance to Sri Lanka. The managing director assured the finance minister that the IMF would continue to actively engage with Sri Lanka, the ministry said.

Sri Lanka is facing its worst economic crisis since independence with food and fuel shortages, soaring prices and power cuts affecting large numbers of people, leading to massive protests over the handling of the situation by the government.

The economic situation has led to huge protests with demands for the resignation of Prime Minister Mahinda Rajapaksa and President Gotabaya Rajapaksa.

Sitharaman had a bilateral meeting with Georgieva on the sidelines of the IMF and World Bank spring meetings. The finance minister and the managing director of the IMF were accompanied by senior officials like Anantha V. Nageswaran, chief economic adviser and Gita Gopinath, FDMD of the IMF, the finance ministry said in an official statement.

During the meeting, they discussed several issues currently facing global and regional economies. Georgieva also referred to an effective policy mix followed by India which was well targeted. She commended India for its contribution to IMF capacity development activities, the ministry added in the statement.

Explaining India’s policy approach, Sitharaman mentioned that an accommodative fiscal stance also comes with major structural reforms including the bankruptcy code and targeted aid to MSMEs and other vulnerable sections.

Sitharaman said the Monetary Authority fully supports and complements these efforts with a dovish stance. The finance minister further said that India has been helped by good agricultural production, buoyed by good monsoon during the COVID pandemic period. Agricultural exports, as well as other exports, also rose sharply. India is entering into new economic activities that will help solve some of the problems in the global supply chain, she added.

(With agency contributions)

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