IMF says SL economic reform program now yielding first signs of recovery
By: Staff Writer
January 20, Colombo (LNW): The International Monetary Fund (IMF) says the economic reform program implemented by the Sri Lankan authorities is now yielding the first signs of recovery with positive real GDP growth in the third quarter of 2023, low inflation, increased revenue collection, and a build-up of external reserves.
Commending the commendable progress made by putting debt on a path towards sustainability, the IMF mission team highlighted that execution of the domestic debt restructuring was an important milestone, Senior Mission Chief Peter Breuer told a media conference in Colombo.
However, swift completion of final agreements with official creditors and reaching a resolution with external private creditors remain critical, the statement underscored.
According to the delegation, progress in meeting key commitments under the IMF-supported program is set to be formally assessed in the context of the second review of the EFF arrangement alongside the forthcoming 2024 Article IV consultation assessing Sri Lanka’s economic health.
the International Monetary Fund (IMF) says it is critical for Sri Lanka to swiftly complete the final agreements with the official creditors and reach a resolution with the external private creditors.
IMF mission team, led by Senior Mission Chief Peter Breuer, was in Sri Lanka from January 11-19 to discuss recent macroeconomic developments and progress in implementing economic and financial policies under the EFF arrangement.
“Building on the Central Bank of Sri Lanka’s success in taming inflation, future monetary policy decisions should remain prudent with a focus on keeping inflation expectations well anchored.
Against continued uncertainty, it remains important to continue rebuilding external buffers through strong reserve accumulation. Protecting the poor and the vulnerable through improved targeting and better coverage of cash transfers remains critical.
“To safeguard the stability of the financial sector and bolster its capacity to support economic growth, the authorities need to urgently finalize amendments to the Banking Act in line with their commitment under the IMF-supported program, implement the bank recapitalization plan and strengthen the financial supervision and crisis management framework.
The authorities have made commendable progress with putting debt on a path towards sustainability. The execution of the domestic debt restructuring was an important milestone.
A swift completion of final agreements with official creditors and reaching a resolution with external private creditors remain critical. Progress in meeting key commitments under the IMF-supported program will be formally assessed in the context of the second review of the EFF arrangement alongside the forthcoming 2024 Article IV consultation assessing Sri Lanka’s economic health.
