## IMF Executive Board Completes the First Review Under the Extended Fund Facility Arrangement with Sri Lanka _IMF News, December 12, 2023_ ## Source details **Canonical URL:** [IMF Executive Board Completes the First Review Under the Extended Fund Facility Arrangement with Sri Lanka](https://www.imf.org/en/news/articles/2023/12/12/pr23439-sri-lanka-imf-executive-board-completes-first-review-under-eff-arrangement) ## Other formats - [Markdown version](/en/news/articles/2023/12/12/pr23439-sri-lanka-imf-executive-board-completes-first-review-under-eff-arrangement/index.md) - [Structured JSON version](/en/news/articles/2023/12/12/pr23439-sri-lanka-imf-executive-board-completes-first-review-under-eff-arrangement/index.json) - [Bundle manifest](/en/news/articles/2023/12/12/pr23439-sri-lanka-imf-executive-board-completes-first-review-under-eff-arrangement/bundle-manifest.json) ## Bibliographic details - Published: December 12, 2023 --- ### Review outcome and financing - The Executive Board completed the first review under the 48-month Extended Fund Facility (EFF) Arrangement. - Immediate disbursement: SDR 254 million (about US$337 million). - Total IMF financial support disbursed so far: SDR 508 million (about US$670 million). - Total EFF Arrangement amount at program approval (March 20, 2023): SDR 2.286 billion (about US$3 billion). ### IMF assessment of program performance - Overall program performance: satisfactory. - Quantitative performance criteria at end-June: all met except the one on expenditure arrears. - Indicative targets at end-June: all met except the one on tax revenues. - Structural benchmarks due by end-October 2023: most either met or implemented with delay. - Governance milestone: publication of the Governance Diagnostic Report — the first in Asia and a structural benchmark under the program. ### Progress on macroeconomic objectives and debt treatment - Commendable progress noted on: - Restoring debt sustainability. - Raising revenue. - Rebuilding reserve buffers. - Reducing inflation. - Safeguarding financial stability. - Debt treatment developments: - Agreements-in-principle with the Official Creditors Committee and Export-Import Bank of China on debt treatments are consistent with EFF targets. - Swift completion and signature of Memoranda of Understanding with official creditors are important. - Timely implementation of agreements and reaching comparable terms with external private creditors should help restore debt sustainability over the medium term. ### Policy priorities and recommendations - Sustaining reform momentum and strong ownership of reforms is paramount. - Key priorities listed by the IMF: - Advancing revenue mobilization. - Aligning energy pricing with costs. - Strengthening social safety nets and protecting social spending. - Rebuilding external buffers. - Safeguarding financial stability. - Eradicating corruption and enhancing governance. - Reinforcing revenue-based fiscal consolidation supported by revenue administration reforms. - Central Bank focus: continue the multi-pronged disinflation strategy and accumulate reserves, supported by exchange rate flexibility. - Financial sector: implement the bank recapitalization plan and strengthen financial supervision and crisis management framework. ### Selected economic indicators and projections (highlights) - Real GDP growth: - 2020: -4.6 - 2021: 3.5 - 2022: -7.8 - 2023 (Est.): -3.6 - 2024 (Projections): 1.8 - 2025: 2.7 - 2026: 3.0 - 2027: 3.1 - 2028: (no figure provided) - Inflation (average, Colombo CPI): - 2020: 4.6 - 2021: 6.0 - 2022: 45.2 - 2023 (Est.): 17.9 - 2024 (Projections): 7.9 - 2025: 5.6 - 2026: 5.4 - 2027: 5.3 - 2028: 5.2 - Public finance (in percent of GDP) — selected: - Revenue and grants: - 2020: 8.8 - 2021: 8.3 - 2022: 10.2 - 2023: 13.0 - 2024: 15.0 - 2025: 15.1 - 2026: 15.2 - Expenditure: - 2020: 21.0 - 2021: 20.0 - 2022: 18.5 - 2023: 19.0 - 2024: 20.3 - 2025: 19.7 - 2026: 19.3 - Central government balance: - 2020: -12.2 - 2021: -11.7 - 2022: -10.2 - 2023: -8.8 - 2024: -4.2 - 2025: -3.9 - Central government debt (in percent of GDP): - 2020: 96.7 - 2021: 102.7 - 2022: 115.5 - 2023: 107.8 - 2024: 110.3 - 2025: 111.4 - 2026: 110.8 - 2027: 108.0 - 2028: 104.6 - Public debt 2/ (in percent of GDP): - 2020: 105.1 - 2021: 114.9 - 2022: 125.8 - 2023: 114.1 - 2024: 115.9 - 2025: 116.3 - 2026: 115.1 - 2027: 111.7 - 2028: 107.9 - Gross official reserves (end of period, in millions of U.S. dollars): - 2020: 5,664 - 2021: 3,139 - 2022: 1,898 - 2023: 3,806 - 2024 (Proj.): 5,346 - 2025: 7,477 - 2026: 9,894 - 2027: 13,525 - 2028: 15,320 - Gross official reserves (In percent of ARA composite metric): - 2020: 46.0 - 2021: 24.7 - 2022: 16.4 - 2023: 33.2 - 2024: 44.7 - 2025: 59.9 - 2026: 77.1 - 2027: 99.7 - 2028: 109.6 - Usable Gross official reserves (end of period) 3/: - 2020: 1,565 - 2021: 462 - 2022: 2,371 - 2023: 3,910 - Subsequent row shows: 1.0; 20.7; 32.7 (as provided) - External debt (public and private, in billions of U.S. dollars): - 2020: 53.4 - 2021: 58.4 - 2022: 57.4 - 2023: 53.8 - 2024: 55.5 - 2025: 57.7 - 2026: 63.4 - 2027: 65.1 - External debt (as a percent of GDP): - 2020: 63.2 - 2021: 65.9 - 2022: 76.7 - 2023: 64.7 - 2024: 68.0 - 2025: 70.4 - 2026: 71.8 - 2027: 72.7 - 2028: 70.3 - Balance of payments (in millions of U.S. dollars) — selected: - Exports: - 2020: 10,048 - 2021: 12,499 - 2022: 13,106 - 2023: 12,365 - 2024: 13,555 - 2025: 14,377 - 2026: 15,111 - 2027: 15,846 - 2028: 16,651 - Imports: - 2020: -16,055 - 2021: -20,638 - 2022: -18,291 - 2023: -17,887 - 2024: -20,718 - 2025: -23,002 - 2026: -24,322 - 2027: -25,144 - 2028: -26,049 - Current account balance: - 2020: -1,187 - 2021: -3,285 - 2022: -744 - 2023: 1,232 - 2024: -634 - 2025: -908 - 2026: -879 - 2027: -846 - 2028: -764 - Current account balance (in percent of GDP) — series includes values such as: - 2020: 0.5 - 2021: -2.1 - 2022: 0.1 - 2023: 2.9 - 2024: 1.2 - 2025: 0.9 - 2026: 1.1 - 2027: 1.3 - 2028: (no figure provided) ### Risks and implementation emphasis - Timely completion of creditor agreements and comparable treatment from external private creditors are critical risks/conditions for restoring debt sustainability. - Continued timely implementation of structural and governance reforms is emphasized to deliver tangible economic gains to citizens. - Protecting the poor and vulnerable via strengthened social safety nets remains a priority while pursuing fiscal consolidation. *Source: IMF Press Release No. 23/439 — "IMF Executive Board Completes the First Review Under the Extended Fund Facility Arrangement with Sri Lanka", December 12, 2023.* --- ## Content in this bundle - **Press Release-English** - [Press Release-English (Markdown version)](/-/media/files/news/press-release/2023/pr23439-sinhala-sri-lanka.pdf.md){rel="alternate" type="text/markdown"} - [Press Release-English (PDF)](/-/media/files/news/press-release/2023/pr23439-sinhala-sri-lanka.pdf){rel="external" type="application/pdf"} - **pr23439-tamil-sri-lanka** - [pr23439-tamil-sri-lanka (Markdown version)](/-/media/files/news/press-release/2023/pr23439-tamil-sri-lanka.pdf.md){rel="alternate" type="text/markdown"} - [pr23439-tamil-sri-lanka (PDF)](/-/media/files/news/press-release/2023/pr23439-tamil-sri-lanka.pdf){rel="external" type="application/pdf"} --- ## 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/) - [Press Release](https://www.imf.org/en/News/Articles/2023/03/20/pr2379-imf-executive-board-approves-under-the-new-eff-arrangement-for-sri-lanka) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2023/12/12/pr23439-sri-lanka-imf-executive-board-completes-first-review-under-eff-arrangement_