The International Monetary Fund (IMF) has announced that they have reached a staff-level agreement with the Sri Lankan authorities to conclude the first review of the 48-month Extended Fund Facility (EFF)-supported program. This agreement is based on discussions that took place between the IMF staff and Sri Lankan officials, according to a press release by the IMF.
"Sustaining the reform momentum is of paramount importance in steering the economy towards a sustained recovery and fostering stable, inclusive economic growth," IMF Senior Mission Chief for Sri Lanka Mr. Peter Breuer, and Deputy Mission Chief Ms. Katsiaryna Svirydzenka said in a statement, according to the press release. "We welcome the authorities’ commitment to increase revenues and signal better governance by adopting needed tax measures, strengthening tax administration, and actively eliminating tax evasion. Maintaining cost recovery in fuel and electricity pricing helps mitigate fiscal risks arising from state-owned enterprises. Further strengthening the social safety net remains critical to protect the poor and the vulnerable."
According to the press release, IMF Senior Mission Chief for Sri Lanka, Mr. Peter Breuer, and Deputy Mission Chief, Ms. Katsiaryna Svirydzenka, along with IMF staff and Sri Lankan authorities, have achieved a staff-level agreement for the first review of the 48-month Extended Fund Facility (EFF)-supported program. Upon approval by the IMF Management and Executive Board, Sri Lanka will gain access to approximately US$330 million in financing, equivalent to SDR 254 million.
The original agreement proposes a 48-month normal-access Extended Arrangement under the EFF, providing access to SDR 2.286 billion (about US$3 billion). Key program priorities include revenue-based fiscal consolidation, social safety nets, fiscal institutional reforms, energy pricing reforms, public debt sustainability restoration, price stability, financial sector stability, and structural reforms for growth enhancement.