Sri Lanka gets cautious thumps up from IMF
The International Monetary Fund last week said Sri Lanka is so far doing well in its economic reforms to reach the targets to remain eligible for the US$ 1.5 billion Extended Fund Facility (EFF), despite the challenges posed by the recent climate shocks, which has slowed economic growth below 4.5 percent.
“Despite these somewhat challenging circumstances, policy performance on fiscal, monetary and reserve accumulation has been very strong, in terms of performance related to our programme agreements,” IMF Mission Chief Jaewoo Lee said.
A positive conclusion to the 3rd review under the EFF would lead to the release of the next US$ 251 million EFF tranche in November.
Lee said that the country has reached the June quantitative targets and is on track to reach the September’s continuous performance criteria required to be met under the 3rd review.
“The quantitative targets for June 2017, the size of fiscal balance, extent of revenue collection and the level of international reserves have all met the targets—meaning that policy performance has been fully satisfactory for the programme. September indicative targets; we still have a few more days till the end of September, but it seems to be on good track,” he said last week.
The IMF delayed the third tranche of US$ 167.2 million by three months, which was eventually disbursed in July, since the country was not able to meet the reserves accumulation target for December 2016.
Lee noted that the September indicative targets will be crucial in the IMF Executive Board giving the thumbs up for the release of the 4th tranche, and that a few more weeks will be required to finalize the September performance.
However, he said that a staff level agreement for the 3rd Review is nearing finalization, with just ‘a few ‘t’s to be crossed and ‘i’s to be dotted’. “We’re extremely close to reaching the staff level agreement, except for some fine tuning in some of the finer aspects of the programme,” Lee added.