Statement by IMF Deputy Managing Director Kenji Okamura at the Conclusion of His Visit to Sri Lanka

IMF News, June 1, 2023

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Canonical URL: Statement by IMF Deputy Managing Director Kenji Okamura at the Conclusion of His Visit to Sri Lanka

Press Release No. 23/193
Visit concluded in Colombo on June 1, 2023.
Visit followed the approval on March 20, 2023, by the IMF Executive Board of 48-Month arrangements of about US$ 3 billion under the Extended Fund Facility (EFF) with Sri Lanka.
Purpose: to deepen understanding of Sri Lanka’s challenges and to reiterate the IMF’s commitment to support Sri Lanka’s efforts under the EFF-supported economic program.

The authorities demonstrated strong commitment to implement an ambitious economic reform program supported by the IMF.
Sri Lanka’s economy is showing tentative signs of improvement, in part due to implementation of critical policy actions, but the economic recovery remains challenging.
Economic crisis origins: policy missteps aggravated by external shocks.
Visits included Parliament, dock yard, port terminal, and the port city, where continued economic activity was observed as testament to the resiliency of the Sri Lankan economy.
Authorities have stepped up efforts to increase public spending on social safety nets while improving targeting and coverage for those who need it.

Fiscal measures, in particular revenue measures, are important for a return to macroeconomic stability.
Authorities committed to negotiate a debt strategy in a timely and transparent manner; continued open dialogue with creditors will help reach restructuring agreements to restore debt sustainability in line with program targets.
Safeguarding the stability of the financial sector is of utmost importance in the stabilization and restructuring process.
Decisive implementation of structural reforms is essential to attract investment and boost growth.
Strengthening governance is a central pillar of the program to safeguard the hard-won gains of the Sri Lankan people.

It is imperative to protect the poor and the most vulnerable who have been disproportionately affected by the crisis.
Authorities have increased public spending on social safety nets and are improving targeting and coverage.

The IMF affirmed its commitment to continue partnership with Sri Lanka through the EFF-supported economic program.
The Deputy Managing Director expressed appreciation for excellent, long-standing relations between Sri Lanka and the IMF and highlighted the importance of strong ownership of reforms by both the authorities and the Sri Lankan people.

Statement by IMF Deputy Managing Director Kenji Okamura at the Conclusion of His Visit to Sri Lanka, June 1, 2023; Press Release No. 23/193.