INSUBCONTINENT EXCLUSIVE:
The International Monetary Fund (IMF) staff and the Sri Lankan authorities have reached staff-level agreement on economic policies to
IMF Executive Board, Sri Lanka will have access to about US$344 million in financing.The IMF says that program performance remains strong
overall and that economic growth is rebounding
Revenue mobilization, reserve accumulation, and structural reforms are advancing as envisaged while debt restructuring is nearly complete
Importantly, the government remains committed to program objectives.However, global trade policy uncertainty poses significant downside
formulate policy responses within the contours of the IMF-supported program.After constructive discussions in Colombo and during the
International Monetary Fund (IMF) and World Bank Spring Meetings in Washington DC, IMF Mission Chief for Sri Lanka Evan Papageorgiou issued
staff-level agreement is subject to IMF Executive Board approval, contingent on: (i) the implementation of prior actions relating to
restoring electricity cost-recovery pricing and ensuring proper function of the automatic electricity price adjustment mechanism; and (ii)
The post-crisis growth rebound of 5 percent in 2024 is remarkable
Revenue mobilization reforms had improved revenue-to-GDP ratio to 13.5 percent in 2024, from 8.2 percent in 2022
Gross official reserves reached US$6.5 billion at end-March 2025 given sizeable foreign exchange purchases by the central bank
Substantial fiscal reforms have strengthened public finances
Based on preliminary data, most end-March quantitative targets for which data is available were met
Most structural benchmarks due by end-April were either met or implemented with delay
However, the continuous structural benchmark on cost-recovery electricity pricing remains not met
revenue mobilization efforts and prudent budget execution remain critical to preserve the limited fiscal space, to allow appropriate
responses if shocks materialize
Restoring cost-recovery electricity pricing is essential to minimize fiscal risks and enable appropriate electricity infrastructure
The tax exemption framework should be well designed to reduce fiscal costs and corruption risks, while enabling growth
critical to continue rebuilding external buffers through reserves accumulation, to allow appropriate responses if shocks materialize
Inflationary pressures remain contained and banks are well capitalized
to protect the poor and vulnerable at this uncertain time
It is important to continue efforts to improve targeting, adequacy, and coverage of social safety nets
program objectives has enhanced confidence and ensures policy continuity
Going forward, sustaining reform momentum including by reducing corruption vulnerabilities, is critical to safeguard the hard-won gains,
with the Honorable Deputy Minister of Finance and Planning Dr
Harshana Suriyapperuma, Central Bank of Sri Lanka Governor Dr
Nandalal Weerasinghe, Secretary to the Treasury Mr
