IMF suggests Sri Lanka to adopt country specific action plan for economic prosperity

Government authorities are now vested with the task of adopting the country specific action plan of putting the economic recovery on a firm footing that will benefit all Sri Lankans, IMF Senior Mission Chief Peter Breuer told a media conference in Colombo today.  

Following the publication of the IMF Governance Diagnostic report, it is now imperative to formulate this national plan for implementing the recommendations in the report beyond the priority commitments under the EFF arrangement, he said.

At the same time, ensuring an enabling environment for governance and transparency reforms to take place is the key to bolstering public confidence and facilitating implementation of these important efforts.

Sustaining the reform momentum and ensuring timely implementation of all programme commitments are critical to rebuilding confidence and economic recovery

Swift progress towards the introduction of a progressive property tax is key to ensuring fair burden sharing while sustaining the revenue-based consolidation, he emphasised.

Tax policy measures need to be accompanied by strengthening tax administration, removing tax exemptions, and actively eliminating tax evasion to make the reforms more sustainable and to further build confidence among creditors to support Sri Lanka’s efforts to regain debt sustainability.

“Building on the Central Bank of Sri Lanka’s success in taming inflation, future monetary policy decisions should remain prudent with a focus on keeping inflation expectations well anchored.”

Against continued uncertainty, it remains important to continue rebuilding external buffers through strong reserve accumulation. Protecting the poor and the vulnerable through improved targeting and better coverage of cash transfers remains critical, he pointed out. (Bandula)