IMF ready to support Sri Lanka beyond current programme

The International Monetary Fund has said it is prepared to continue supporting Sri Lanka after the current IMF-backed programme ends, with future assistance depending on the preferences of the Sri Lankan authorities.

IMF Deputy Director for the Asia and Pacific Department Sonali Jain-Chandra said the Fund remained committed to supporting Sri Lanka in whatever form the country considered appropriate.

She said future engagement could include a new financing arrangement, policy advice, surveillance or capacity development.

Jain-Chandra said discussions on the nature of any future engagement would take place in due course, but stressed that the IMF would remain a partner to Sri Lanka regardless of the form that support takes.

The current programme is due to conclude in March next year.

She said, however, that significant work remained under the existing arrangement.

The staff-level agreement on the Seventh Review, reached between IMF staff and the Sri Lankan authorities in early October, is expected to be considered by the IMF Executive Board in the coming weeks, she said.

A further review mission is also expected before the programme expires.

Jain-Chandra said Sri Lanka therefore needed to maintain its focus on macroeconomic stability and continue implementing reforms.

She said the country’s macroeconomic position had improved significantly since the height of the economic crisis.

Government revenue had doubled during the reform period, while debt restructuring was now largely complete, she said.

Sri Lanka had also recorded positive economic growth for 11 consecutive quarters following the sharp contraction during the crisis.

Jain-Chandra said the country had also implemented important structural reforms, including measures related to governance.

She said the results showed that the reform programme had produced significant gains, but warned that those gains needed to be consolidated and sustained.