International Monetary Fund extends US$ 1.5 billion EFF with Sri Lanka by another year
The International Monetary Fund (IMF) has extended its US$ 1.5 billion Extended Fund Facility (EFF) with Sri Lanka by one year.
The Fund has however warned the Sri Lankan government that a concentrated effort was needed to preserve ‘hard-won’ gains of fiscal consolidation to meet debt repayments, reach growth of 3.5% in 2019, and continue State-owned enterprise (SOE) reforms.
A staff team from the IMF led by Manuela Goretti had visited Colombo from 14-28 February to resume discussions on the fifth review under Sri Lanka’s economic reform programme supported by a three-year EFF arrangement.
The IMF has released a statement last Friday to mark the resumption of the programme.
“The team welcomes the Sri Lankan authorities’ ongoing efforts to bring their economic reform programme back on track following the political turmoil of late 2018.
“The team reached understandings at the staff level with the Sri Lankan authorities on the fifth review and their request to extend the EFF arrangement for an additional year with the remaining disbursements being evenly spread over this period to allow more time for the completion of the economic reform agenda.
“Subject to the planned submission to Parliament of the 2019 Budget consistent with the EFF-supported programme, the Board is expected to consider Sri Lanka’s request for completion of the fifth review in May 2019.”
The Sri Lankan government is to present its 2019 Budget proposals on Tuesday (5).
OSL take:
The decision by the IMF to extend its EFF to Sri Lanka by another year would help the further consolidation of Sri Lanka’s economy. The country’s economy is on a growth path and all key economic indicators are showing signs of stability. Sri Lanka’s private sector is already showing signs of growth and is mostly engaged in expansion programmes. Therefore, Sri Lanka’s attraction as a business destination would further improve along with these indications.
| Article Code : | VBS/AT/20190305/Z_3 |