IMF offers Sri Lanka immediate access to $350 mn
This brings the total IMF financial support disbursed so far to SDR 1.27 billion ($1.74 billion).
The IMF executive board recently completed the fourth review under the 48-month Extended Fund Facility with Sri Lanka.
Despite a positive economic outlook, global trade policy uncertainties pose significant risks to Sri Lanka's macroeconomic and social stability, the IMF said. It offered the country immediate access to special drawing rights worth 254 million to support economic policies and reforms. Sustained revenue mobilisation is critical to restoring fiscal sustainability and creating fiscal space, it noted.
'Sri Lanka's performance under the Fund-supported arrangement is generally strong with some implementation risks being addressed. Reforms are bearing fruit, with economic growth strengthening, inflation remaining low, reserves accumulating and fiscal revenues improving. The debt restructuring process is nearing completion,' noted Kenji Okamura, IMF deputy managing director and acting chair, in a statement.
'Sustained revenue mobilisation is critical to restoring fiscal sustainability and creating fiscal space. Strengthening tax exemption frameworks, boosting tax compliance and enhancing public financial management to ensure effective arrears management are important,' he said.
'Further improving the coverage and targeting of social support to the vulnerable is also necessary. A smoother execution of capital spending within the fiscal envelope would help foster medium-term growth,' he added.
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