Sabry Warns Against Renegotiating IMF DSA

COLOMBO (News 1st); Foreign Minister and Minister of Justice, Prison Affairs, and Constitutional Reforms, Ali Sabry, has warned against any attempts to renegotiate the Debt Sustainability Agreement (DSA). 

Sabry detailed the stringent parameters of the DSA, which include reducing the current debt from 133% to 95%, lowering the GDP percentage allocated for foreign loan settlements from 9.3% to 4.5%, achieving a 2.1% surplus on the primary balance, and ensuring that 15% of the GDP comes from tax revenue. 

He stressed that these conditions have now become part of the law and cannot be easily altered.

The Minister highlighted that resuming negotiations with the IMF could jeopardize the next tranche due in December, as well as subsequent disbursements from the World Bank (WB) and the Asian Development Bank (ADB).

“If you try to renegotiate and change it, it will take another year. If that happens, the IMF will not give their next tranche of $400 million in December. If they don’t give, the World Bank will not give their next tranche of $400 million. And if they don’t give, ADB will not give their next tranche of $500 million,” Sabry explained. 

As a result, between December 2024 and January 2025, the country could lose between USD 1.2 billion to 1.3 billion, which could lead to further instability, Minister Ali Sabry warned.

He warned that without this funding, the country could face severe economic instability, including a tumbling rupee and rising inflation.

Minister of Foreign Affairs and Justice, Prison Affairs & Constitutional Reform, President’s Counsel Ali Sabry emphasized that renegotiating with the International Monetary Fund (IMF) is a very serious and unsuccessful endeavour.