• IMF says macroeconomic policies starting to bear fruit

Sri Lanka’s overall performance in the International Monetary Fund (IMF) has been strong as the macroeconomic policies have started to bear fruit, an IMF official said.

Speaking on Thursday(16), IMF Director of Communications Julie Kozack said that the completion of the second review by the Executive Board of the IMF requires the implementation of prior actions agreed by the Sri Lankan authorities and completion of  financial assurance review.

She said that the completion of the financial assurance review includes confirmation from multilateral partners, financing contributions and the adequate progress of the debt restructuring.

Some of the prior action authorities should implement for the second review include the implementation of the Public Debt Management Act and the Public Financial Management Act,which aims to reinforce fiscal discipline by introducing binding fiscal rules and is essential for meeting ambitious fiscal targets, notably a primary surplus target of 2.3% of GDP by 2025.

“Macroeconomic policies in Sri Lanka are starting to bear fruit” Kozack said.

She added that commendable outcomes include the rapid decline in inflation, robust reserve accumulation and initial signs of economic growth while preserving stability in the financial system.

“Overall programme performance has been strong,” Kozack said.

Moreover,she said that the next step with respect to Sri Lanka’s debt restructuring is to conclude negotiations with external private creditors and implement the agreements in principle with Sri Lanka’s official creditors. 

She noted that Sri Lanka should finalise the agreements in principle with official creditors.

The Government expects to finalise external debt restructuring in June and receive the third tranche of the IMF programme.