IMF team reaches consensus on the fund supported programme progress
The International Monetary Fund (IMF) team now in Sri Lanka is nearing completion of its preliminary review on the fund-supported economic reform programme with some reservations relating to quantitative performance, informed official sources divulged
The team has reached consensus in overall achievements of the government pledges so far during their discussions with Sri Lankan fiscal and monetary authorities, a high ranking Finance Ministry official told the Business Times.
The final discussion of the review will be held on September 26 under the patronage of President Ranil Wickremesinghe
The IMF team comprising Peter Breuer (Senior Mission Chief), Katya Svirydzenka (Deputy Mission Chief), Mike Li, Sophia Zhang, Dmitriy Rozhkov, Noda Selim, Sandesh Dhungana, Nui Miao, Mark Adams (virtual), Joei Turkewitz and Nuong Lan Vu has carried out the preliminary review in-depth.
‘The authorities’ failure and delays in the fulfillment of some of their commitments have not been taken into account by the IMF team as such matters occur due to circumstances outside the control of government’, he said adding that it is premature to come to any conclusion on the assessments of the IMF team. The IMF mission has already completed the quantitative performance assessment of the economic reforms programme’s macroeconomic variables under the control of country authorities such as monetary and credit aggregates, international reserves, fiscal balances, and external borrowing.
But the delay in achieving timely restructuring agreements with creditors in line with the programme targets essential to restoring debt sustainability was a setback for debt sustainability.
Keeping up the reform momentum and ensuring timely implementation of programme commitments, including to ensure central bank independence, improve governance, and protect the vulnerable, are key for Sri Lanka to emerge from the economic crisis, Peradeniya University economics and statistics Professor Wasantha Athukorala disclosed.
The IMF team also looked into the non-accumulation of new external payments arrears on external debt which has to be monitored continuously by the authorities and any non-observance will be detrimental to the VIII of the IMF’s Articles of Agreement.
They have already focused attention on government tax revenue, social safety net spending, cost of non-commercial obligations for fuel and electricity as well as on Treasury guarantees perusing government documents.
The reform measures that often cannot be quantified but are critical for achieving programme goals and used as markers to assess implementation have also been reviewed by the IMF team.
These include the strengthening of tax administration, improve fiscal transparency, anti-corruption and rule of law as well as reform State-Owned Enterprises (SOEs) and their governance.
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