COLOMBO: Debt-stricken Sri Lanka, which declared bankruptcy last year, is showing signs of economic improvement but its recovery still faces challenges, the International Monetary Fund (IMF) said on Friday.

The Indian Ocean island nation declared bankruptcy in April 2022 and said it was suspending repayment of its foreign debt. It reached an agreement with the IMF in March on a nearly $3-billion bailout program over four years.

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