Saturday, 18 May 2019 05:04

Sri Lanka ’s economic reform programme backed by IMF back on track

Sri Lanka ’s economic reform programme supported by the International Monetary

Fund’s (IMF) Extended Fund Facility (EFF) of US$1.5 billion now back on track after its suspension since the instigation of political impasse by the President on October 26 last year.

IMF mission chief or Sri Lanka Manuela Goretti pointed out sustained revenue mobilisation will be needed going forward to place public debt on a downward path, supported by stronger fiscal rules and the recently launched medium debt strategy.

Reforms of State Owned Enterprises (SOEs) would also help mitigate fiscal risks she told a video conference arranged for local media in Colombo yesterday.

The Sri Lankan authorities should renew their efforts to strengthen SOE governance and transparency, including by advancing a restructuring plan for SriLankan Airlines and completing energy pricing reforms, building on important progress with the implementation of the fuel pricing formula, she added.

Upon the granting of waivers of nonobservance for the end‑December 2018 performance criteria on the primary balance and net official international reserves, the IMF makes available SDR 118.5 million (about US$ 164.1 million), bringing total disbursements under the arrangement to SDR 833.73 million (about US$ 1.155 billion)..

The IMF Executive Board also approved an extension of the arrangement by one additional year, until June 2, 2020 , with rephasing of remaining disbursements.

Continued implementation of structural reforms is essential to support strong and inclusive growth.

Efforts should focus on liberalizing trade, improving the business environment and promoting investment, strengthening governance, encouraging female and youth labor force participation, enhancing social protection, and improving crisis preparedness to natural disasters, she added.


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