A man walks towards a market place carrying curry leaves in Colombo, Sri Lanka, Tuesday, March 21, 2023. (PHOTO / AP)

COLOMBO - Sri Lanka has received the first tranche of an IMF bailout programme, President Ranil Wickremesinghe told parliament on Wednesday.

The crisis-ridden island nation was scheduled to receive a $330 million tranche, the first part of a nearly $3 billion bailout approved by the International Monetary Fund on Monday.

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The IMF bailout is expected to catalyse additional support to the tune of $3.75 billion from the likes of the World Bank, the Asian Development Bank and other lenders

"This sets the stage for Sri Lanka to have better fiscal discipline and improved governance," Wickremesinghe said.

The IMF bailout is expected to catalyse additional support to the tune of $3.75 billion from the likes of the World Bank, the Asian Development Bank and other lenders. It clears the way for Sri Lanka to rework a substantial part of its $84 billion worth of public debt.

State finance minister Shehan Semasinghe said in an interview that Sri Lanka is ready to engage in restructuring talks with bilateral and private creditors to recover debt sustainability as "soon as possible."

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This was the 17th IMF bailout for Sri Lanka and the third since the country's decades-long civil war ended in 2009.

Wickremesinghe said that the receipt of the IMF credit facility is a step towards building a better future for the youth and uplifting the country.

"We are now starting a new journey. We must introduce many economic reforms throughout the process," he said.

Some of these reforms have already been proposed and implemented through the interim budget of 2022 and the budget for 2023, the president added.

He said that the government aims to reduce the primary deficit to 2.3 percent of gross domestic product (GDP) by 2025 and increase revenue to 14 percent of the GDP by 2026.

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Economic mismanagement coupled with the impact of the COVID-19 pandemic left Sri Lanka severely short of dollars for essential imports at the beginning of last year, tipping the island nation into its worst financial crisis in seven decades.