• Tue. May 28th, 2024

Sri Lanka’s macroeconomic situation showing tentative signs of improvement – IMF

An International Monetary Fund (IMF) mission led by Messrs. Peter Breuer and Masahiro Nozaki conducted a staff visit to Colombo from May 11 to 23, 2023 to discuss recent economic developments and implementation of the Fund-supported program.

“During the visit, we discussed recent macroeconomic and financial sector developments.
Following strong policy efforts, the macroeconomic situation in Sri Lanka is showing tentative
signs of improvement, with inflation moderating, the exchange rate stabilizing, and the Central
Bank rebuilding reserves buffers. However, the overall macroeconomic and policy
environment remains challenging,” Messrs. Breuer and Nozaki in a statement said.

The team met with President and Minister of Finance Ranil Wickremesinghe, Governor Nandalal
Weerasinghe, Secretary to the Treasury Siriwardana, senior government officials, members of
the opposition parties, CSOs, think tanks, trade unions, the private sector, and development
partners.

The first review of the program is scheduled to be undertaken in September 2023.

The team stressed that achieving timely restructuring agreements with creditors in line with the program targets by the time of the first review is essential to restoring debt sustainability

“Keeping up the reform momentum and ensuring timely implementation of program commitments, including to ensure central bank independence, improve governance, and protect the vulnerable, are key for Sri Lanka to emerge from the economic crisis,” it added.

The mission discussed additional fiscal efforts that will be critical to ensure successful revenue mobilization. It also discussed progress on debt restructuring, noting the ongoing discussions with both foreign and domestic creditors.

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