Citi Says Sri Lanka Needs Debt Restructuring as Signaled by IMF

Sri Lanka will have to undergo debt restructuring as strongly suggested by the International Monetary Fund in order to secure financing from creditors, according to Citigroup Global Markets.

The prescription follows IMF’s observation that fiscal consolidation efforts alone to pare debt to safe levels would be too large to be economically and politically feasible. While the IMF didn’t specify what a safe level is, Citi sees reduction to a 79.7% public debt ratio witnessed between 2010-18 as a good benchmark from 119% level last year.