ADB approves US $ 350mn special budget support loan for Sri Lanka
■ „Loan is part of a broader package of financial assistance anchored by IMF’S EFF „■ Says implementing governance reforms and anticorruption measures critical for recovery
■ ADB repurposed US $ 334mn of existing loans as emergency response to support import of essential items in 2022
The Asian Development Bank (ADB) yesterday approved a US $ 350 million special policy-based loan to provide budget support to Sri Lanka for economic stabilisation.
“The programme is part of a broader package of financial assistance anchored by the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) for the country, which aims to stabilise the economy and lay the foundation for economic recovery and sustained growth,” the ADB said in a statement.
Sri Lanka is facing a severe and unprecedented economic crisis. High inflation has eroded purchasing power, livelihoods have been affected and past development gains have been reversed.
“The ADB is concerned about the deep crisis in the country and its impact on the people of Sri Lanka, especially the poor and vulnerable, particularly women,” said ADB President Masatsugu Asakawa.
“The ADB is committed to standing with Sri Lanka as it addresses its present challenges and strides toward economic stabilisation, sustainable recovery and inclusive growth,” he added.
Sri Lanka has embarked on bold reforms to address the causes of both internal and external imbalances and return to a sustainable debt trajectory.
“The country faces a long road to recovery and must remain steadfast in the implementation of necessary reforms, which include enhancing tax revenue collection, strengthening public financial management, improving performance of stateowned enterprises, ensuring autonomy and independence of the Central Bank, safeguarding financial sector stability and bolstering governance frameworks.
As these measures are implemented, it is essential to ensure that adequate social protection is provided. Implementing governance reforms and anticorruption measures will be critical,” the ADB said.
“Transparency and open communication will be crucial in building agreement around the reforms. The ADB will proactively engage with the government, other stakeholders and development partners to help address structural impediments and plan future support,” it added.