PM Ranil wants to implement the IMF program by mid-June

Sri Lanka is looking to fast-track talks with the International Monetary Fund and agree on a loan by mid-June so that it can then approach other lenders for urgently needed funds.

The bankrupt nation will slash its budget expenditure to “bare bones” and hopes to break even or post a primary surplus of 1% of gross domestic product by 2025, Prime Minister Ranil Wickremesinghe said in an interview at his office in Colombo Wednesday. “We need to find the dollars -- the IMF will not bring in the entire thing,” Wickremesinghe said. Wickremesinghe is seeking a total of about $4 billion this year, from the multilateral lender and creditors including China and Japan, to help pay for food and fuel.

“It is good news that Sri Lanka is placing a priority on talks with the IMF,” said Guido Chamorro, co-head of emerging-market hard-currency debt at Pictet Asset Management, which holds Sri Lankan bonds. Wickremesinghe -- who took on the additional role of finance minister on Wednesday -- forecast that the economy will shrink 4% this year. “I can feel their anger,” Wickremesinghe said.

Once an IMF deal is agreed, Wickremesinghe said he would seek debt restructuring from Beijing. “We’re not in a debt trap,” Wickremesinghe said. While the debt talks continue, Wickremesinghe is also trying to contain anger against Rajapaksa.