Sri Lanka poised for strong growth - IMF
IMF releases Fifth Tranche
The fourth review of the Sri Lanka Stand-by
Arrangement (SBA) was successfully completed by the International
Monetary Fund (IMF). The fifth tranche to the value of around US dollars
212.5 million has been disbursed by the IMF on September 24. With this
disbursement, a total of US dollars 1,275 million has been received thus
far by Sri Lanka on account of the SBA facility approved in July 2009,
Central Bank said.
After reviewing Sri Lanka’s economic performance under SBA
International Monetary Fund (IMF) stated that the country’s economic
conditions are improving and shows strong growth for this year.
“Sri Lanka’s performance under the program has been satisfactory.
Overall economic conditions are improving, and the economy is likely
to show strong growth this year on the back of improved fundamentals and
political stability,” IMF Executive Board Deputy Managing Director and
Acting Chair, Murilo Portugal said.
Sustaining high, socially inclusive growth will require substantially
higher levels of private investment, underpinned by broad-based
structural and financial sector reforms. “The government’s financial
sector reform agenda is on track. Further reforms include putting in
place a deposit insurance system, establishing a regulatory framework
for private sector pensions and deepening capital markets, which will
facilitate private investment,” he said.
Fundamental tax reform, including reform of the investment promotion
regime, is central to achieving the government’s budget deficit
reduction targets while creating the fiscal space for much-needed
reconstruction and infrastructure investment, as well as social
spending. In this regard, the 2011 budget will be key to demonstrate the
government’s continued commitment to the program’s goals.
“Further improvements in monetary policy formulation will provide
useful support for macroeconomic stability.
The Central Bank is now in a position to move gradually toward a
flexible framework that targets inflation more directly. The recent
introduction of more exchange rate flexibility will support such a
transition while also helping to maintain competitiveness”, he said. |