• 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.
• Completion of the second review by the IMF’s Executive Board requires prior actions, including implementing the Public Debt Management Act and the Public Financial Management Act to enforce fiscal discipline and meet a primary surplus target of 2.3% of GDP by 2025, along with a financial assurance review.

Sri Lanka’s overall performance in the International Monetary Fund (IMF) has been strong as macroeconomic policies have started to bear fruit, according to IMF Director of Communications Julie Kozack. Speaking on Thursday, Kozack highlighted that the completion of the second review by the IMF’s Executive Board necessitates the implementation of prior actions agreed upon by Sri Lankan authorities and the completion of a financial assurance review. This review includes confirmation from multilateral partners, financing contributions, and adequate progress in debt restructuring. Key prior actions for the second review include the implementation of the Public Debt Management Act and the Public Financial Management Act, which aim to reinforce fiscal discipline by introducing binding fiscal rules essential for achieving a primary surplus target of 2.3% of GDP by 2025.

Kozack commended Sri Lanka’s macroeconomic policies, noting commendable outcomes such as the rapid decline in inflation, robust reserve accumulation, and initial signs of economic growth while maintaining stability in the financial system. She emphasized that the overall program performance has been strong and mentioned that the next step in Sri Lanka’s debt restructuring involves concluding negotiations with external private creditors and implementing agreements in principle with official creditors. The Sri Lankan government aims to finalize external debt restructuring by June and receive the third tranche of the IMF program.

Strong performance under IMF prog. | The Morning