Sri Lanka: First Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for a Waiver of Nonobservance of Performance Criterion, Modification of Performance Criteria, Rephasing of Access, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka

IMF Staff Country Reports, December 12, 2023

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Canonical URL: Sri Lanka: First Review Under the Extended Arrangement Under the Extended Fund Facility, Requests for a Waiver of Nonobservance of Performance Criterion, Modification of Performance Criteria, Rephasing of Access, and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Sri Lanka

Focus: First Review under the Extended Arrangement under the Extended Fund Facility; Requests for a Waiver of Nonobservance of Performance Criterion; Modification of Performance Criteria; Rephasing of Access; and Financing Assurances Review.
Overall program judgment: Sri Lanka’s performance under the program was satisfactory.
Key emphasis: Strong commitment to improving governance and protecting the poor and vulnerable remains critical.

Signs of stabilization noted: rapid disinflation, significant revenue-based fiscal adjustment, and reserves build-up.
The authorities have made commendable progress toward:
- restoring debt sustainability,
- raising revenue,
- rebuilding reserves buffers,
- reducing inflation,
- safeguarding financial stability.

Performance criteria and indicative targets:
- All but one-performance criteria were met at end-June.
- All but one indicative targets were met at end-June.
Structural benchmarks:
- Most structural benchmarks due by end-October 2023 were either met or implemented with delay.
Notable deliverable: the authorities published the Governance Diagnostic Report, making Sri Lanka the first country in Asia to undergo the IMF Governance Diagnostic exercise.

Subject areas: Asset and liability management, Credit, Debt restructuring, Foreign exchange, International organization, Monetary policy, Money, Public debt, Revenue administration.
Keywords: arrangement Sri Lanka, Asia and Pacific, authorities' effort, Credit, Debt restructuring, Global, headline inflation, IMF staff estimate, invitation of the authorities, Middle East, revenue administration reform, South Asia, Sri Lanka rupee, Sri Lankan authorities.