IMF ‘okays’ Sri Lanka’s 6th Extended Fund Facility

The International Monetary Fund (IMF) has announced that it has reached a Staff-Level Agreement on the Sixth Review of Sri Lanka’s Extended Fund Facility, following the staff team’s two-week visit to the island.

A staff team from the IMF led by Manuela Goretti visited Colombo during September 10-25, 2019 to conduct the sixth review under Sri Lanka’s economic reform program supported by a four-year Extended Fund Facility (EFF) arrangement.

The IMF team welcomed the authorities’ efforts to normalize the security situation in the country after the tragic terrorist attacks in April and mitigate the impact of the shock on the economy.

The IMF revised the Real GDP growth to 2.7 percent in 2019 and it is projected to improve to 3.5 percent in 2020, as tourist arrivals and related activities gradually recover.

Inflation is expected to remain stable at around 4.5 percent during 2019-20.

Despite the recent fall in tourist arrivals and remittances, the current account balance is projected to improve to 2.6 percent of GDP in 2019 on the back of lower imports and stronger exports supported by the exchange rate correction in late 2018.

The team said Trade and investment liberalization, SOE reforms, and stepped-up anti-corruption efforts will be important to bolster Sri Lanka’s competitiveness and medium-term growth.

(Source: News Radio)