Sri Lanka: Staff Report for the 2016 Article IV Consultation and Request for a Three-Year Extended Arrangement under the Extended Fund Facility—Press Release; Staff Report; Staff Statement, and Statement by the Executive Director for Sri Lanka
IMF Staff Country Reports, June 14, 2016
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- Sri Lanka: Staff Report for the 2016 Article IV Consultation and Request for a Three-Year Extended Arrangement under the Extended Fund Facility—Press Release; Staff Report; Staff Statement, and Statement by the Executive Director for Sri Lanka
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Bibliographic details
- Published: June 14, 2016
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781475532388.002
Summary and main findings
- This paper discusses economic performance, outlook, and risks of Sri Lankan economy.
- Macroeconomic performance in 2015 reflected a mix between positive underlying growth momentum, the negative impact of unbalanced domestic policies, and an increasingly difficult external environment.
- The government fiscal deficit expanded to 6.9 percent of GDP in 2015.
- The overall balance of payments deteriorated significantly in 2015 despite an improvement in the terms of trade.
- Sri Lanka’s short-term outlook is challenging, but medium-term prospects are favorable if current macro-financial imbalances can be addressed.
- The key risks to the outlook stem from (1) government inaction on key policies and (2) a significant deterioration in the external environment.
Macroeconomic performance (2015)
- Positive underlying growth momentum alongside negative impacts from unbalanced domestic policies.
- Increasingly difficult external environment contributed to weaker macro outcomes.
Fiscal and external accounts
- Fiscal: government fiscal deficit expanded to 6.9 percent of GDP in 2015.
- External: overall balance of payments deteriorated significantly in 2015 despite an improvement in the terms of trade.
Outlook and risks
- Short-term outlook: challenging.
- Medium-term prospects: favorable if current macro-financial imbalances can be addressed.
- Key risks:
- Government inaction on key policies.
- Significant deterioration in the external environment.
Subjects and keywords
- Subject: Credit, Expenditure, Money, Public debt, Public financial management (PFM), Revenue administration
- Keywords: Asia and Pacific, core inflation, CR, Credit, data update, foreign exchange development, foreign exchange management, Global, headline inflation, IMF arrangement, ISCR, Monetary Board of the CBSL, monetary policy stance, South Asia