{
  "title": "Sri Lanka: Staff Report for the 2014 Article IV Consultation and Second Post-Program Monitoring Discussion",
  "publication": "IMF Staff Country Reports, September 18, 2014",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2016/12/31/sri-lanka-staff-report-for-the-2014-article-iv-consultation-and-second-post-program-41927",
  "canonical": "https://www.imf.org/en/publications/cr/issues/2016/12/31/sri-lanka-staff-report-for-the-2014-article-iv-consultation-and-second-post-program-41927",
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  "summary": "KEY ISSUES Context. Macroeconomic performance has generally exceeded expectations. Real GDP grew 7.3 percent for 2013, up from 6.3 percent in 2012. Inflation declined to below 5 percent, and the external current account balance has improved.",
  "publishDate": "2014-09-18",
  "series": "IMF Staff Country Reports",
  "sections": [
    {
      "heading": "Context: recent macroeconomic performance",
      "content": "- Real GDP grew 7.3 percent for 2013, up from 6.3 percent in 2012.\n- Inflation declined to below 5 percent.\n- The external current account balance has improved.\n- Private credit growth has been slow.\n- A number of financial sector indicators have deteriorated."
    },
    {
      "heading": "Outlook and risks",
      "content": "- Growth is expected to remain robust at 7 percent.\n- Inflation is expected to remain in the mid-single digits.\n- The external current account should improve marginally, allowing for further accumulation of foreign exchange reserves.\n- Near-term risks:\n  - Appear moderate.\n  - Potential for disruptions from market turbulence and climatic events (\"some bumps in the road\").\n- Medium-term risks:\n  - Potential for tighter external liquidity.\n  - Challenge of further fiscal and debt consolidation while maintaining high levels of investment in infrastructure and human capital.\n  - Need to maintain a balanced monetary policy.\n  - Risks to competitiveness in a shifting economic landscape."
    },
    {
      "heading": "Key findings and statistics",
      "content": "- Real GDP: 7.3 percent (2013); 6.3 percent (2012).\n- Inflation: declined to below 5 percent (level not further specified).\n- Growth projection: 7 percent.\n- Inflation projection: mid-single digits.\n- External current account: improved and expected to improve marginally.\n- Private credit growth: characterized as slow.\n- Financial sector indicators: described as deteriorated."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Fiscal policy and debt\n  - Fiscal consolidation and debt reduction need to continue.\n  - The burden of adjustment needs to shift decisively to revenue generation.\n  - Debt targets could potentially be recast to achieve deeper reduction over a longer period.\n- Monetary policy\n  - Monetary policy needs to maintain a balance between supporting growth and containing inflation.\n  - A continued forward-looking approach is needed given long lags in monetary transmission.\n- Financial sector\n  - Financial sector consolidation could lead to economies of scale, greater resilience, and more effective supervision.\n  - Corporate governance needs to continue to improve.\n  - Careful supervision in the post-consolidation period will be key.\n- External position and competitiveness\n  - Maintaining competitiveness and achieving a more sustainable external position will require:\n    - Continued innovation.\n    - Sustained investment in infrastructure and human capital.\n    - A predictable business environment.\n    - Ideally a heavier emphasis on direct investment and equity portfolio flows than debt.\n\nSri Lanka: Staff Report for the 2014 Article IV Consultation and Second Post-Program Monitoring Discussion (September 18, 2014).\n\n---\n\n Content in this bundle\n\n- cr14285\n  - cr14285 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - cr14285 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/cr/issues/2016/12/31/sri-lanka-staff-report-for-the-2014-article-iv-consultation-and-second-post-program-41927"
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    "Published: September 18, 2014",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9781484327692.002",
    "Real GDP grew 7.3 percent for 2013, up from 6.3 percent in 2012.",
    "Inflation declined to below 5 percent.",
    "The external current account balance has improved.",
    "Private credit growth has been slow.",
    "A number of financial sector indicators have deteriorated.",
    "Growth is expected to remain robust at 7 percent.",
    "Inflation is expected to remain in the mid-single digits.",
    "The external current account should improve marginally, allowing for further accumulation of foreign exchange reserves.",
    "Near-term risks:",
    "Medium-term risks:",
    "Real GDP: 7.3 percent (2013); 6.3 percent (2012).",
    "Inflation: declined to below 5 percent (level not further specified).",
    "Growth projection: 7 percent.",
    "Inflation projection: mid-single digits.",
    "External current account: improved and expected to improve marginally.",
    "Private credit growth: characterized as slow.",
    "Financial sector indicators: described as deteriorated.",
    "Fiscal policy and debt",
    "Monetary policy",
    "Financial sector",
    "External position and competitiveness",
    "**_cr14285**"
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