Reveals overall macroeconomic and policy environment remains challenging following conclusion of Staff review mission
Discusses additional fiscal efforts critical to ensure successful revenue mobilisation
Stresses timely debt restructuring essential to restoring debt sustainability
Insists keeping up the reform momentum, timely implementation of program commitments key for SL to emerge from the economic crisis
The International Monetary Fund (IMF) yesterday said there are “tentative signs of improvement” in Sri Lanka whilst the overall macroeconomic and policy environment remains challenging.
This observation follows the conclusion of an IMF staff mission led by Peter Breuer and Masahiro Nozaki to Colombo from 11 to 23 May to discuss recent economic developments and implementation of the Fund-supported program.
At the conclusion of the visit, Messrs. Breuer and Nozaki issued the following statement:
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 stabilising, and the Central Bank rebuilding reserves buffers. However, the overall macroeconomic and policy environment remains challenging.
We welcome the authorities’ ongoing efforts in meeting key commitments under the Fund-supported program. Performance under the program will be formally assessed in the context of the first review of the Extended Fund Facility arrangement, which is expected to be undertaken in September 2023. The mission discussed additional fiscal efforts that will be critical to ensure successful revenue mobilisation. We also discussed progress on debt restructuring, noting the ongoing discussions with both foreign and domestic creditors.
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.
The team met with President and Finance Minister Finance Ranil Wickremesinghe, CBSL Governor Dr. Nandalal Weerasinghe, Treasury Secretary Mahinda Siriwardana, senior Government officials, members of the Opposition parties, CSOs, think tanks, trade unions, the private sector, and development partners. We would like to thank the authorities for the open and collaborative discussions and look forward to our continued close engagement.