Home » US and CCC welcome the IMF approval of EFF 1st review for SL reforms

US and CCC welcome the IMF approval of EFF 1st review for SL reforms


By: Staff Writer

Colombo (LNW): The United States of America and the Ceylon Chamber of Commerce welcomed the IMF Executive Board approval for Sri Lanka’s first Extended Fund Facility review for growth enhancing reforms.

“We welcome the positive news from the IMF Board about the completion of the first Extended Fund Facility review with Sri Lanka, providing access to about $337 million for Sri Lanka to use to support its economic reforms and policies,” said US Ambassador to Sri Lanka Julie Chung.

She said that this crucial step for Sri Lanka emphasizes the continued importance of sustained reforms, and improved governance for the country’s progress, while safeguarding the most vulnerable.

The Ambassador said that the United States will continue to support Sri Lanka’s path to economic stability and prosperity.

On Wednesday (12), the IMF Board completed the first review under the 48-month Extended Fund Facility with Sri Lanka, providing the country with access to about US$ 337 million to support its economic policies and reforms.

The IMF said that Sri Lanka’s performance under the program was satisfactory.

“All but one performance criteria and all but one indicative targets were met at end-June. Most structural benchmarks due by end-October 2023 were either met or implemented with delay,” it added.

The Ceylon Chamber of Commerce welcomes the Board approval of the International Monetary Fund’s (IMF) completion of its first review under the 48-month Extended Fund Facility (EFF) with Sri Lanka.

“This milestone, granting Sri Lanka access to approximately $ 337 million, underscores the nation’s commitment to fulfilling key performance criteria and benchmarks,” Ceylon Chamber said in a statement.

“Notably, this includes the release of the Governance Diagnostic Report and initiating debt restructuring agreements with key international creditors.

These steps signify Sri Lanka’s robust commitment to reform, particularly in revenue-based fiscal consolidation, bank recapitalisation, and enhanced financial supervision, aligning with efforts to restore debt sustainability, rebuild reserves, reduce inflation, and ensure financial stability.

The Government’s dedication to improving governance and safeguarding the vulnerable sectors of society is also commendable,” the Ceylon Chamber said.

Acknowledging these achievements as highlighted by the IMF, the Ceylon Chamber emphasised the need to continue this reform momentum.

Despite the advancements made, unchanged business sentiment since late 2023 reflects subdued confidence primarily due to persistent challenges, underscoring the imperative for continual reform, particularly in fostering growth.

In light of recent increases in taxation, which has contributed to inflation and impacted people’s purchasing power, the Chamber underscored the necessity of economic growth to improve these aspects.

The Ceylon Chamber said it advocates prioritising sectors such as tourism, ports and logistics, renewable energy, and exports and emphasises the importance of digitalisation of revenue authorities and other government agencies, as well as the introduction of advanced technology in the agricultural sector.

The digital initiatives aligned with the IMF’s guidelines are crucial for enhancing fiscal efficiency, transparency, and governance.

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