22 March 2024 07:28 am
The International Monetary Fund (IMF) yesterday said the Sri Lankan authorities are making good progress in implementing an ambitious reform agenda under the Extended Fund Facility (EFF), and the outcomes are commendable.
The positive outcomes includes rapid disinflation, robust reserve accumulation, and initial signs of economic growth while preserving the stability of the financial system.
Noting that public finances have strengthened following substantial fiscal reforms, IMF Senior Mission Chief Peter Breuer said the programme performance was strong, with all quantitative performance criteria and indicative targets for end-December 2023 met except for the indicative target on social spending.
“Most structural benchmarks due before end-February 2024 were either met or implemented with delay. Reforms in some areas are still ongoing,” he said addressing the media at a press briefing held in Colombo.
As growth has turned positive after six consecutive quarters of contraction, registering 1.6 percent and 4.5 percent y-o-y growth in the third and fourth quarters of 2023 respectively, the visiting delegation acknowledged that the economic situation is gradually improving.
High-frequency economic indicators point to a continued pick-up in manufacturing, construction, and services. Inflation has come down from a peak of 70 percent in September 2022 to 5.9 percent in February 2024. Gross official reserves increased to US$4.5 billion at end-February 2024 with sizeable foreign exchange purchases by the Central Bank.