## IMF Staff Concludes Visit to Sri Lanka

_IMF News, January 19, 2024_

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## Bibliographic details
- Published: January 19, 2024

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### Mission timing and context
- Press Release No. 24/14 dated January 19, 2024.
- IMF mission led by Mr. Peter Breuer visited Sri Lanka from January 11 to 19, 2024.
- End-of-Mission press release; views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.
- Progress in meeting key commitments under the IMF-supported program will be formally assessed in the context of the second review of the Extended Fund Facility (EFF) arrangement alongside the forthcoming 2024 Article IV consultation.

### Indicators of early recovery
- Real GDP recorded positive growth of 1.6 percent year-on-year in the third quarter of 2023, the first expansion in six consecutive quarters.
- Gross international reserves increased by USD 2.5 billion during 2023.
- Shortages of essentials have eased.
- Inflation remains contained.
- Preliminary data point to improved fiscal revenue collections during the fourth quarter of 2023.

### Policy recommendations and priorities
- Sustain the reform momentum and ensure timely implementation of all program commitments to rebuild confidence and put recovery on a firm footing that will benefit all people.
- Introduce a progressive property tax swiftly to ensure fair burden sharing while sustaining revenue-based consolidation.
- Accompany tax policy measures with:
  - Strengthening tax administration.
  - Removing tax exemptions.
  - Actively eliminating tax evasion.
- Future monetary policy decisions should remain prudent with a focus on keeping inflation expectations well anchored.
- Continue rebuilding external buffers through strong reserve accumulation given continued uncertainty.
- Protect the poor and the vulnerable through improved targeting and better coverage of cash transfers.

### Financial sector and governance actions
- Urgent finalization of amendments to the Banking Act in line with commitments under the IMF-supported program.
- Implement the bank recapitalization plan.
- Strengthen the financial supervision and crisis management framework to safeguard financial sector stability and bolster its capacity to support economic growth.
- Following the IMF Governance Diagnostic report publication, authorities should adopt their own action plan for implementing the report’s recommendations beyond priority commitments under the EFF arrangement.
- Ensure an enabling environment for governance and transparency reforms to bolster public confidence and facilitate implementation.

### Debt restructuring and creditor engagement
- Execution of the domestic debt restructuring was an important milestone.
- A swift completion of final agreements with official creditors and reaching a resolution with external private creditors remain critical to fully restoring debt sustainability.

### Mission engagements and acknowledgments
- IMF team met with President and Finance Minister Ranil Wickremesinghe; Central Bank of Sri Lanka (CBSL) Governor Dr. P. Nandalal Weerasinghe; Speaker Mr. Mahinda Yapa Abeywardana; Minister Mr. Kanchana Wijesekera; Minister Mr. Wijeyadasa Rajapakse; State Minister Mr. Shehan Semasinghe; Secretary to the Treasury Mr. K M Mahinda Siriwardana; Governor of Northern Province Mrs. P.S.M.Charles; Governor of Eastern Province Senthil Thondaman; and other senior government and CBSL officials.
- The IMF team also met with Parliamentarians, representatives from the private sector, civil society organizations, and development partners.
- The mission included a visit to the Northern and Eastern provinces, which enriched the mission team’s understanding of challenges and potential in Sri Lanka.
- IMF Communications Department media relations contact: PRESS OFFICER: Huong Lan ‘Pinky’ Vu. Phone: +1 202 623-7100 Email: MEDIA@IMF.org @IMFSpokesperson

*Source: IMF Staff Concludes Visit to Sri Lanka (Press Release No. 24/14, January 19, 2024).*

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## References

- [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/)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2024/01/18/pr2414-sri-lanka-imf-staff-concludes-visit_