IMF Executive Board to endorse Sri Lanka’s EFF programme third review soon
The International Monetary Fund (IMF) Board of Directors will endorse the third review under Sri Lanka’s Extended Fund Facility (EFF) programme by the end of this month.
The review, conducted by the IMF staff team in November 23, has looked into the country’s economic progress and reform commitments.
This staff-level agreement will be presented to the Executive Board and is subject to Executive Board approval.
But it’s also contingent upon, among other things, implementation by the new government authorities of prior actions, including submission of the 2025 budget that is consistent with parameters identified under the IMF supported program in Sri Lanka, Julie Kozack, IMF Director of the Communications Department told a media briefing in Washington on Thursday.
The new government authorities expressed their commitment to the main objectives and key parametres of the IMF-supported programme, including the fiscal and debt targets to restore debt sustainability, an IMF spokesman told The Sunday Times Business in response to questions raised via email.
The IMF is encouraged by the authorities’ commitment to continue the reform efforts. Sustaining revenue mobilisation efforts remains critical.
The IMF-supported programme will continue prioritising progressive tax measures and social protection reforms to protect the poor and vulnerable from the impact of the crisis and policy adjustments, he said.
Every review gives the opportunity to assess recent economic developments and jointly determine the reform measures with the authorities for the period ahead.
While there is scope for some adjustments based on new economic developments, staying within the broad parametres of the programme remains key for achieving its objectives, he pointed out.
IMF Executive Director Krishnamurthy Subramanian met President Anura Kumara Dissanayake on Thursday ahead of the new government’s maiden budget scheduled to be presented on February 17, the President’s office said
A comprehensive discussion regarding the progress of the Extended Fund Facility (EFF) agreed with the IMF took place between President Dissanayake and the IMF delegation, it added.
The current government has already reached a staff-level agreement with the IMF on the third review regarding the extended arrangement under the US$ 3 billion dollar EFF.
If Sri Lanka fails to meet major conditions or benchmarks, the IMF will assess the situation to determine necessary adjustments or technical support. The institution’s primary aim remains fostering macroeconomic stability and sustainable growth through adherence to policy frameworks.
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