17 October 2022 10:49 am
The International Monetary Fund (IMF) said that Sri Lanka is and will remain a middle-income country even after a decline in the Gross Domestic Product (GDP).
Mixed sentiments were expressed by the government last week when a proposal was approved in Cabinet to voluntarily downgrade Sri Lanka’s income status so that it can receive more concessions to help brave through the economic crisis that was brought about by severe mismanagement.
IMF Official Anne-Marie Gulde-Wolf stressed that “the EFF is not concessional. It’s a regular IMF facility.”
The Fund is currently working closely with the World Bank (WB) and the Asian Development Bank (ADB) on programmes for Sri Lanka.
While expressing confidence in the programmes helping to close the financing gap, Gulde-Wolf stressed the policies under the other multilateral lenders in their areas of expertise will be essential to resolve Sri Lanka’s longer-term growth problems.
Last week, the President’s Office shared Sri Lanka was pursuing a ‘reverse graduation policy,’ for a limited period of time.
President Ranil Wickremesinghe previously made references to Sri Lanka being deprived of concessional funding since it moved to the middle-income country bracket.
Sri Lanka was upgraded to an upper middle-income country in July 2019 by the World Bank after the country’s Gross National Income (GNI) increased from US$ 3,840 in 2018 to US$ 3,996. It slipped to the lower middle-income status a year after when the per-capita income reversed gains as Sri Lanka entered into a recession.