Sri Lanka: 2007 Article IV Consultation: Staff Report; Staff Supplements; Public Information Notice on the Executive Board Discussion; and Statement by the Alternate Executive Director for Sri Lanka
IMF Staff Country Reports, December 3, 2007
Source details
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- Sri Lanka: 2007 Article IV Consultation: Staff Report; Staff Supplements; Public Information Notice on the Executive Board Discussion; and Statement by the Alternate Executive Director for Sri Lanka
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Bibliographic details
- Published: December 3, 2007
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451823585.002
Executive summary and macroeconomic assessment
- The staff report for the 2007 Article IV Consultation on Sri Lanka highlights economic growth development and performance.
- Rising inflation, a high current account deficit, and low unemployment rate indicate that the economy may be operating at full capacity.
- High stock of public debt, rising near-term debt service needs, and a low level of reserves point to elevated external vulnerabilities.
Key findings and risks
- Inflation: described as rising (no numeric inflation rate provided in the source summary).
- Current account: characterized as a high current account deficit.
- Labor market: low unemployment rate, implying near-full capacity utilization.
- Public finances and external vulnerabilities:
- High stock of public debt.
- Rising near-term debt service needs.
- Low level of reserves.
Policy recommendations and priorities
- Fiscal policy:
- A more determined fiscal consolidation is essential for demand management and debt sustainability.
- Exchange rate policy:
- Greater flexibility in the exchange rate is essential to safeguard reserves.