The International Monetary Fund (IMF) stated on Wednesday that Sri Lanka has made excellent progress in carrying out challenging but essential reforms, adding that these efforts are paying off as the economy is exhibiting hesitant signs of stability.
During its visit to Colombo from September 14 to September 27, an IMF mission team led by Peter Breuer and Katsiaryna Svirydzenka discussed economic and financial policies in order to support the approval of the program’s first review under the Extended Fund Facility (EFF) arrangement.
Inflation has decreased from a peak of 70% in September 2022 to below 2% in September 2023, according to a statement released after the debate, and gross international reserves have increased by 1.5 billion US dollars between March and June this year.
“Despite early signs of stabilization, full economic recovery is not yet assured. Growth momentum remains subdued, with real GDP in the second quarter contracting by 3.1 percent on a year-on-year basis and high-frequency economic indicators continuing to provide mixed signals. Reserve accumulation has slowed in recent months,” the statement said.
The statement added that the authorities have met the program’s primary balance targets and remain committed to this crucial pillar of the program in order to support their efforts to restore debt sustainability. It stated that maintaining the reform momentum is critical to put the economy on a path towards long-lasting recovery and stable and inclusive economic growth.
