In a positive development, the United States of America has expressed its approval and support for the International Monetary Fund (IMF) Executive Board’s endorsement of Sri Lanka’s inaugural Extended Fund Facility (EFF) review. This milestone decision allows Sri Lanka access to approximately $337 million, earmarked to bolster the nation’s economic reforms and policies.
US Ambassador to Sri Lanka, Julie Chung, welcomed the news, stating, “We welcome the positive news from the IMF Board about the completion of the first Extended Fund Facility review with Sri Lanka, providing access to about $337 million for Sri Lanka to use to support its economic reforms and policies.” She underscored the significance of this crucial step for Sri Lanka, emphasizing the ongoing importance of sustained reforms and improved governance for the country’s progress, with a particular focus on safeguarding vulnerable populations.
Ambassador Chung affirmed the United States’ commitment to supporting Sri Lanka on its journey towards economic stability and prosperity.
The IMF Board’s completion of the first review under the 48-month Extended Fund Facility on Wednesday marked a substantial financial boost for Sri Lanka, as it gained access to $337 million to support its economic policies and reforms. The IMF acknowledged Sri Lanka’s satisfactory performance under the program, noting the fulfillment of most performance criteria and indicative targets by the end of June. Structural benchmarks, due by end-October 2023, were reported as either met or implemented with slight delays.
The IMF’s review summarized positive outcomes, including macroeconomic stabilization through rapid disinflation, fiscal adjustment, and reserve build-up. Additionally, debt restructuring agreements were reached with official creditors and China, contributing to enhanced debt sustainability. The publication of a Governance Diagnostic Report was highlighted as a positive step towards addressing corruption.
However, the review outlined challenges and priorities, emphasizing the need for sustained reform momentum, fiscal consolidation, continued disinflation efforts, strengthened financial sector measures, and reinforced social safety nets.
In conclusion, the IMF expressed optimism about Sri Lanka’s progress under the EFF program but underscored the crucial importance of sustained commitment and strong ownership of reforms for a full and swift recovery.
