IMF Representatives review the Loan facility extended to Sri Lanka with Finance Minister

IMF representatives today met the Minister of Finance Mr Ravi Karunanayake  for a mission review of the  $1.5 billion loan approved for Sri Lanka under the Extended Fund Facility (EFF) to support the country’s economic reform agenda.

Mr. Jaewoo Lee IMF Representative and  the Country Representative for Sri Lanka and Maldives Ms Eteri Kyintradgze  met the Minister of Finance at his Ministry and reviewed the progress of the reforms agenda of the government. The Secretary to Treasury  Dr. R.H.S. Samaratunga was also associated with Minister of Finance at this discussion.

The Executive Board of the International Monetary Fund (IMF)  in June had approved a 36-month extended arrangement under the Extended Fund Facility (EFF) with Sri Lanka for an amount equivalent to SDR 1.1 billion (about US$1.5 billion) to support the country’s economic reform agenda.

Finance Minister Ravi Karunanayake who thanked the IMF for its timely assistance explained in details the economic targets set by the unity government. Elaborating the government’s  fiscal consolidation  target the Minister said that the government was very clear in gradually  reducing the overall fiscal deficit to 3.5 percent of GDP by 2020.

“We had a budget deficit of 6.7 % of the GDP last year and this year’s target will be 5.4%. it will be further reduced to 4.7%  in 2017” asserted the Minister

The Minister  also briefed the IMF representatives on the Policies and programmes undertaken to support adjustment and reforms. Apart from the  Fiscal consolidation, the other areas included under reforms are revenue mobilization, Public financial management and the reforms in the  State owned enterprises.

The IMF mission Representatives admired the progress made in the right direction under the reforms agenda. They also expressed the hope that the Unity Government of  Sri Lanka would be able to achieve desired  economic progress in the near future as stimulated  in their reforms agenda.

The first tranche of the Loan was disbursed in June and the rest will be disbursed in five equal  tranches and the next tranche is due in November. The reports of the review meeting the  Mission Representatives  held with the Minister of Finance Mr Ravi Karunanayake in the presence of the Treasury Secretary Dr R.H.S.Samaratunga will be tabled in the IMF November regular meeting enabling the disbursement of the 2nd tranche of the IMF Loan.