By Libby George, Karin Strohecker and Uditha Jayasinghe LONDON (Reuters) -Sri Lanka reached a draft deal with creditors to restructure $12.5 billion of international bonds, it said on Thursday, in a major boost to the island nation's fragile recovery just two days before its presidential election.

Sri Lankans who usually vote along religious and ethnic lines will be keeping the state of the economy in mind when they vote Saturday on a new president.

On Sept. 21, 17 million Sri Lankans will cast their vote to select the country’s next president. This is the first popular election since the country defaulted on its sovereign debt payments in 2022 and spiraled into its worst economic crisis since it gained independence in 1948.