Sri Lanka economy shows ‘signs of improvement’: IMF

Sri Lanka’s bankrupt economy has shown ”tentative signs of improvement,” a top IMF official has said, underlining that this reform momentum must continue under strong ownership by both the authorities and the Sri Lankan people. These remarks were made by International Monetary Fund Deputy Managing Director Kenji Okamura on Thursday at the end of his two-day official visit to the debt-trapped island nation. “Sri Lanka’s economy is showing tentative signs of improvement, in part due to the implementation of critical policy actions. But the economic recovery remains challenging. Now, more than ever, it is essential to continue the reform momentum under strong ownership by both the authorities and the Sri Lankan people”, he said in a statement. Okamura’s visit followed the approval on March 20, 2023, by the IMF Executive Board of 48-Month arrangements of about USD 3 billion under the Extended Fund Facility (EFF) with Sri Lanka. He said the current economic crisis has its genesis in policy missteps aggravated by external shocks. “We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability. I was encouraged by the authorities’ commitment to negotiating a debt strategy in a timely and transparent manner,” he said. The IMF believes it remains essential to protect the poor and the most vulnerable that have been disproportionately affected by the crisis.