“Any country can of course stand its ground and refuse to move forward based on the IMF’s DSA if it disagrees with the outcomes of the model and the IMF’s assessment,” the Ministry of Finance said in a statement titled “Clarifications on Debt Restructuring and the Debt Sustainability Analysis”.

It added that a standoff in such a scenario would only delay an agreement on a financing programme for several months if not years.

The statement highlighted that the International Monetary Fund (IMF) cannot proceed with a financing programme if a country’s debt is deemed unsustainable.

The statement comes as the National People’s Power (NPP) in its manifesto for the September 21 presidential election said last week that it would work for an alternative debt sustainability analysis and the Washington-based global lender’s condition of revenue-based fiscal consolidation.

The finance ministry statement asserted that Sri Lanka’s agreement with creditors for sovereign debt restructuring needed IMF endorsement “to confirm as the independent actor that the negotiated terms indeed provide the required debt relief to comply with the debt targets”.

ADN