## 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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## Bibliographic details
- Published: June 1, 2023

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### Visit context
- 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.

### Program objectives (as stated)
- Achieve macroeconomic stabilization.
- Restore debt sustainability.
- Safeguard financial stability.
- Strengthen governance.
- Protect the vulnerable.

### Key observations from meetings and visits
- 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.

### Policy priorities and recommendations emphasized
- 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.

### Social protection and inclusivity
- 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.

### Partnerships and outlook
- 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.*

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## References

- [Kenji Okamura](https://www.imf.org/en/About/senior-officials/Bios/kenji-okamura)
- [Sri Lanka and the IMF](http://www.imf.org/external/country/LKA/index.htm)
- [Press Releases](https://www.imf.org/en/news/searchnews)
- [PRESS CENTER](http://presscenter.imf.org/)
- [48-Month arrangements of about US$ 3 billion under theExtended Fund Facility (EFF)](https://www.imf.org/en/Publications/CR/Issues/2023/03/20/Sri-Lanka-Request-for-an-Extended-Arrangement-Under-the-Extended-Fund-Facility-Press-531191)
- [https://www.imf.org/en/Countries/LKA](https://www.imf.org/en/Countries/LKA)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2023/06/01/pr23193-sri-lanka-statement-imf-dmd-okamura-conclusion-his-visit_