Why Sri Lanka Election Puts IMF Bailout Deal in Spotlight

Two years after an economic meltdown almost doubled the rate of poverty in Sri Lanka, the island nation is holding an election to choose a new president. The Sept. 21 vote is shaping up to be a referendum on painful austerity measures that were imposed under a $3 billion bailout from the International Monetary Fund. The race could be tight, with incumbent Ranil Wickremesinghe facing off against two rivals who want to open fresh talks with the IMF.

In late 2019, newly elected President Gotabaya Rajapaksa carried out tax cuts that slashed state revenues just months before the pandemic devastated the economy, with international flights grounded and successive lockdowns ordered. Remittances from Sri Lankans working overseas dried up as many lost their jobs.