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IMF welcomes Sri Lanka’s reforms announced in the budget

Dec 14, 2010 10:06:49 AM - itnnews.lk

The International Monetary Fund has welcomed Sri Lanka’s reforms announced in the budget.

IMF said the deficit target is within reach. It said in a statement that the GDP is likely to grow by around 7.5 percent this year and the 2010 deficit target of 8 percent of GDP is within reach. While challenges remain, the IMF statement commended that the authorities had made substantial progress toward fiscal and external sustainability. The IMF issued the statement assessing the economic progress following the return of an IMF team which visited Colombo from the 1st to the 10th of this month to conduct discussions for the Fifth Review of the 2.5 Billion US Dollar Stand-By Arrangement, approved in July last year.

The IMF observed that although the inflation has risen, mainly due to increase in food prices, the credit growth is picking up as expected, suggesting that the current monetary policy stance remains appropriate. The IMF noted that Sri Lanka’s 2011 budget passed in the parliament last week, targets further deficit reduction along with substantial reforms to the tax system and the investment promotion regime, in line with the authorities’ policy commitments.