COLOMBO, April 11 (Xinhua) -- The International Monetary Fund (IMF) said on Friday that the recent external shock and evolving developments are creating uncertainty for the Sri Lankan economy, which is still recovering from its own crisis.

Evan Papageorgiou, who led an IMF team to visit Colombo from April 3 to 11, said in a statement that more time is needed to assess the impact of the global shock and how its implications for Sri Lanka can be addressed within the contours of its IMF-supported program.

Papageorgiou said Sri Lanka recorded post-crisis growth rebound of 5 percent in 2024, with inflation declining considerably in recent quarters, and gross official reserves increasing to 6.5 billion U.S. dollars at the end of March 2025.

"While inflation remains low, continued monitoring is warranted to ensure sustained price stability and support macroeconomic stability," said Papageorgiou.

Against ongoing global uncertainty, it remains important to continue rebuilding external buffers through reserves accumulation, said the IMF official.

Boosting tax compliance, including by reinstating an efficient and timely VAT refund mechanism, will help contribute to revenue gains without resorting to additional tax policy measures, said Papageorgiou.

The IMF team held discussions with Sri Lankan President Anura Kumara Dissanayake during the visit, focusing on the preliminary review associated with the fourth tranche of Sri Lanka's Extended Fund Facility arrangement with the IMF.

Both parties also exchanged views on emerging economic challenges, particularly in light of new trade tariffs proposed by the United States and their potential implications for Sri Lanka, according to the President's Media Division.

In March 2023, the IMF approved a 48-month Extended Fund Facility arrangement, amounting to approximately 3 billion dollars, to support Sri Lanka's economic reform and recovery efforts. Enditem

Related

Go to Forum >>0 Comment(s)