CB expects economy to enter recovery path by end-2023

10 November 2022 07:41 am - 9 - {{hitsCtrl.values.hits}}

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But says economy’s recovery is contingent on policymakers’ unwavering commitment to implementing reforms
Stresses that IMF EFF programme will provide an opportunity for country to embark on much-needed and long-neglected structural adjustments
Says debt restructuring process with creditors has reached an advanced stage

Following the progress so far made with the International Monetary Fund (IMF) for programme support and the country’s creditors to restructure debt and the key reforms already undertaken and to be implemented in future, the Sri Lankan economy is expected to enter the recovery path in the latter part of 2023, the Central Bank (CB) yesterday said.

However, the monetary authority warned that the economy’s recovery is contingent on the policymakers’ unwavering commitment to implementing policy reforms in a timely, holistic and efficacious manner while ensuring that such commitment remains unhampered by political and election cycles.

“This is imperative to prevent any oscillations of national policies in the crucial period ahead, in order to strengthen the economy’s resilience to external shocks, thereby ensuring its unwavering progress over the medium term,” the Central Bank said in its latest ‘Recent Economic Developments: Highlights of 2022 and Prospects for 2023’, which was published yesterday.

Sri Lanka struck a staff-level deal with the IMF on September 1 for a four-year, US $ 2.9 billion programme under the Extended Fund Facility (EFF). Following the staff-level deal, the Sri Lankan authorities began debt restructuring negotiations with the country’s official creditors. Financial assurances from creditors are required to activate the IMF bailout package. The Central Bank yesterday said the debt restructuring process has reached an advanced stage.

The Central Bank also said the IMF EFF programme would provide an opportunity for the country to embark on the much-needed and long-neglected structural adjustments, which would be instrumental in shaping the economy to progresses on a trajectory of greater stability and sustained growth.

Though it was previously speculated that the IMF board approval for Sri Lanka’s bailout package would be given this December, it now appears that such approval will be delayed, due to the possible delays in reaching an agreement with the creditors. Sri Lanka’s debt restructuring process remains complicated as a large majority of its foreign debt is with China and India, which are non-Paris Club members.

Meanwhile, the Central Bank noted that the much-expected near-term recovery of the economy is fraught with many challenges, due to the unprecedented scale of the crisis the domestic economy is facing and the global uncertainties emanating from the monetary policy tightening measures adopted by major central banks in response to surging inflation, the spillover effects of geopolitical tensions and thereby a looming global recession. Sri Lankan economy is estimated to shrink close to 9 percent this year.

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Comments - 9

Jude Thursday, 10 November 2022 08:11 AM

What recovery!?? SL eternally borrowing and mortgaging the country for next 50 - 60 years!! There's no plans for Short term or long term to increase the GDP!! POLITICIANS looking for Short term solutions, and want to import everything from SALT to Fish!! God sake, we're an island we don't need to import fish and salt!! Agriculture is the only way forward!!

Sunil Thursday, 10 November 2022 09:00 AM

Please recover stolen assets and use them to revive economy

Jude Thursday, 10 November 2022 09:38 AM

Only recovery that can expect when people get rid of the 225 yeah?!

Tax Payer Thursday, 10 November 2022 10:10 AM

All future actions for recovery from the financial quagmire SL has fallen into will result in the citizens having to bear more and more burdens.The blame for this will be put on the IMF and their recommendations. THE IMF OR THE CURRENT PRESIDENT WILL NOT DO ANYTHING TO PROBE THE REASONS FOR THIS SITUATION AND TO TAKE ACTION AGAINST THE CULPRITS RESPONSIBLE FOR BRINGING THE COUNTRY TO THIS STATE.

Curse your greed Thursday, 10 November 2022 12:14 PM

This means we have to suffer for one more year, at least!. The curse of he entire nation will on all the politicians, who fatten their bellies and pockets. How long you beasts expect to live? It is not eternal we are sure! But how many millions have to go without food for your greed?

TR Thursday, 10 November 2022 01:23 PM

SO RANIL IS PLANNING TO DELAY ACTION SO THAT HE CAN CONTINUE. RANILS BOGUS PLAN WILL NOT WORK

Neel gunapala Thursday, 10 November 2022 01:29 PM

Our present CBG also almost same as the "Pin" Prisdent, every day he plays same song . Next ,next month but never materialize. CBG try to protect his post and the present regime.

“ The Lansi Burgher Gent “ Thursday, 10 November 2022 03:13 PM

Beg, borrow and steal. Repeat, repeat and repeat. This miserably failed state, will forever be borrowing and borrowing from Peter to pay Paul and Paul to pay Peter. It’s cyclic. Economic rape, to put it lightly.

Down the prices Thursday, 10 November 2022 04:53 PM

Central bank staff are crooks. Peg dollar, restrict outflows. Already setup for severe deprecation with their years of stupid activities. Current governor likely to cause greater losses to our nation that the scoundrel Mahendren... And public and econmic persons too ignorant to speak against Central Bank corrupt practices, that are thoroughly against free market development.

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CB expects economy to enter recovery path by end-2023

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