FT Friday, 15 September 2023
State Minister of Finance Minister Semasinghe reiterates Govt.’s commitment to economic sustainability in inaugural IMF review
State Minister of Finance Shehan Semasinghe reaffirmed the Government’s unwavering dedication to establishing a sustainable economy at the inaugural meeting of the International Monetary Fund’s (IMF) first review of the Extended Fund Facility (EFF) program at the Presidential Secretariat yesterday.
“We are collaborating closely with the IMF team throughout this process to overcome the challenges ahead of us,” he said via ‘X’ yesterday.
The State Minister also underscored the importance of fostering strong ties with all multilateral institutions, development partners and friendly nations to achieve the country’s economic goals.
Semasinghe expressed gratitude to the IMF team for their steadfast support in Sri Lanka’s pursuit of economic stability.
“We wish to thank the IMF team for the support extended to Sri Lanka,” he added.
The delegation from the IMF will be in Sri Lanka until 27 September as part of the review.
Apart from Semasinghe other representing the Sri Lankan Government in this deliberation were President’s Senior Adviser on National Security and Chief of Staff Sagala Ratnayaka, President’s Secretary Saman Ekanayake, Advisor to the President on Economic Affairs Dr. R.H.S. Samaratunga, Finance Ministry Secretary Mahinda Siriwardena and Central Bank Governor Dr. Nandalal Weerasinghe.
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⍟Given the weak external environment and domestic policy tightening, aimed at restoring macroeconomic stability, the economy is expected to contract by 3% in 2023, before registering a modest growth of 1.5% in 2024. Prospects hinge quite critically on the implementation of the economic reform program.
- weak external environment
- domestic policy tightening
- restoring macroeconomic stability
- Prospects hinge quite critical
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The International Monetary Fund (IMF) delegation comprises Senior Mission Chief Peter Breuer, Deputy Mission Chief Katya Svirydzenka, Mike Li, Sophia Zhang, Dmitriy Rozhkov, Noda Selim, Sandesh Dhungana, Nui Miao, Mark Adams (virtual), Joei Turkewitz, and Nuong Lan Vu.
The final discussion of the review will be held on 26 September under the patronage of President Ranil Wickremesinghe who is currently overseas on an official visit to Cuba and the US,.
In March this year, the IMF Executive Board approved a 48-month Extended Fund Facility of about $ 3 billion aimed to restore Sri Lanka’s macroeconomic stability and debt sustainability, mitigate the economic impact on the poor and vulnerable, safeguard financial sector stability, and strengthen governance and growth potential.
This marked an important step towards the resolution of the crisis. Sri Lanka immediately received an initial disbursement of about $ 330 million from the EFF arrangement, which is expected to catalyse new external financials including from the Asian Development Bank and the World Bank.
Given the weak external environment and domestic policy tightening, aimed at restoring macroeconomic stability, the economy is expected to contract by 3% in 2023, before registering a modest growth of 1.5% in 2024. Prospects hinge quite critically on the implementation of the economic reform program.
The review process is anticipated to be a pivotal milestone in Sri Lanka’s economic journey, reflecting the nation’s determination to implement reforms that will lead to a robust and sustainable financial landscape.
As Sri Lanka continues to forge ahead with its economic revitalisation efforts, the collaboration with the IMF and other international partners is expected to play a crucial role in shaping the country’s economic trajectory.
